The Complete Bad Credit Car Loan Checklist

By Angela Monroe - April 21, 2022

check list

Getting a car loan when you have bad credit can be tough which is why we’ve put together this bad credit car loan checklist to help you get your ducks in a row and, ultimately, leave with keys in your pocket.

The deal with bad credit car loans

In a nutshell, “bad credit” means lenders, like banks, look at a loan applicant as a high risk. This could be because they have a low credit score, you’ve missed repayments on previous or current loans or have had court rulings against you.

Woman looking at codes

There are many ways to fix bad credit, including simply waiting as it doesn’t last forever. 

However, if you have bad credit and need a car loan soon (or now), the following bad credit car loan checklist can be a real help.

Bad credit car loan checklist – things to DO

  1. Know what it all means

Bad, average and good credit relates to someone’s credit history which includes past and current loan repayments, any court rulings or bankruptcies, credit applications and more. If you’ve repaid previous loans on time, your credit history will likely be good, otherwise it might be average or bad.

Everyone typically generates a credit report when they turn 18 and apply for credit the first time – this could be a phone plan or utilities account for example.

  1. Get your credit report and go through it carefully

Everyone’s credit report is personalised for their circumstances – you won’t find two the same even if your friend has a similar job and lifestyle to you.

It’s crucial to actually know if you have bad credit to begin with. Some people think they have bad credit but really don’t – the same can be said for the opposite with people who think their credit history is perfect but actually is labelled as “bad”.

  1. Work out how much you need to borrow

Realistically, how much do you need for the right car for your family and lifestyle? Sure a new LandCruiser or Ranger might be exciting (and awesome) but do you really need it?

To calculate this, figure out how much you can afford to pay back each paycycle. You’ll often have a min and max amount.

  1. Use a car loan calculator

Many loan calculators ask for an interest rate, but even if you don’t know yours yet, they can give you a good idea of what you might be up for.

  1. Reduce your existing debt as much as possible

This means paying off any outstanding debts like overdue utilities bills or fast cash loans. You might not be able to pay off an entire existing debt but try to get as close as possible.

  1. Avoid taking on anymore debt

This means scheduled payments to things like streaming subscriptions, gym memberships or the like.

If possible, cancel any you might have as this can dramatically free up funds and increase your chances of getting approved for a car loan.

It might be a step backwards when cancelling streaming services, but hopefully it’ll only be temporary.

  1. Save some money before you apply for a loan

If you’ve followed the above step, this shouldn’t be too hard. Saving up a little bit of money in the month or even weeks leading up to applying for a loan can be a real help.

This can be for:

  • A deposit
  • Registration costs
  • Insurance
  • Showing a lender that you’re capable of saving / having surplus funds
  • Paying off any outstanding debts
  1. Compare loans

DO NOT DO THIS BY APPLYING FOR MULTIPLE LOANS. Comparing loans can give you the chance to select the best one for your circumstances.

However, beware – applying for loans to different lenders in order for them to provide you with a rate and loan amount matched to your circumstances can often damage your credit file further.

  1. Seek the advice of professional car finance brokers

The solution to the above dilemma is to use a broker who can shop your requirements and profile to find the best loan products without affecting your credit score.

Get started here and the team at Loans For People With Bad Credit will get cracking on finding you the right lender and loan product.

Not only can you avoid damaging your credit score by formally applying to too many lenders, but the team also makes the process smoother, much less stressful and and faster.

Bad credit car loan checklist – Documents required

Car Loan Mistake_ Refinancing

Lenders will require several documents when you apply for bad credit car loans. Different lenders, loan products and applicant profiles require different documents.

Sometimes, chasing up and submitting documents can be a goose chase, but at Loans For People With Bad Credit, we make it simple.

All documents can be submitted via email (digitally) from your phone when using Loans For People With Bad Credit.

Documents include:

  1. A copy of your ID

This verifies your identity and current address. You can also use other forms of ID like a passport or Proof of Age card, among other official photo IDs.

To submit the copy, typically a photo taken with a phone and emailed will suffice.

  1. Proof of income

Usually this means the two or three most recent payslips and can be emailed through.

If you’re self employed, no dramas – you can provide things like BAS income statements or even Tax Returns or anything official that shows a history of regular documented income.

  1. Provide your Centrelink income statements

Did you know that you can use some forms of Centrelink income for car loans?

You’ll need to provide proof of your payments which can also be submitted via email or banking app.

  1. Provide details of all your outstanding debts.

This includes your credit card statements, your mortgage details and details of any other loan you may have.

You can submit these via email too or, in some cases, simply tell your broker over the phone.

  1. Provide your bank statements

You’ll likely need to provide a copy of the last 3 months of your bank statements which again is pretty easy.

Loans For People With Bad Credit provides an online portal which makes submitting bank statements a cinch.

  1. Provide your personal information

This includes your residential address, contact details and your expenses.

At Loans For People With Bad Credit, you can tell us your expenses / cost of living over the phone. 

This helps to get a quick snapshot of your financial situation.

  1. Provide references from 2 individuals

In most cases, you’ll need to provide two references. They’ll only be contacted as a last resort if your lender can’t get hold of you

These personal references need to be someone who can vouch for your reliability. They must not live together or with you so two friends or family members who live on their own would be good.

The bad credit car loan checklist in summary

Taking these steps into consideration and following them can really boost not only your chances of approval, but also your chances of getting a lower interest rate.

There’s quite a lot of preparation required for a bad credit car loan application. You’ll need to explain any missed credit contract payments or defaults that you have on your credit file. 

Having a good reason for a missed repayment can really help as can the above bad credit car loan checklist.

Car Loan Mistake_ Private Sellers

The team at Loans For People With Bad Credit knows the ins and outs – don’t risk doing it alone.

We’re car finance specialists who help people with bad credit get car loans at the best interest rates. To do this, we use our Australia-wide network of lenders and loan products and streamlined processes to ensure you’re matched with the right loan product.

Also, if you make timely repayments and improve your credit position, we have options to shift you to more favourable loan products down the track.

Apply for a car loan on bad credit today

man happy near wall

Armed with the bad credit car loan checklist and the team at Loans For People With Bad Credit, you’ll have the best chances of getting a new car.

Apply today and find out why so many Aussies with bad credit find success through Loans For People With Bad Credit.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

Comments

vinnay Roy

January 18, 2019

Hello,
That was a Great Article to go through well written the possibility of the bad credit car loan.
Here are some possibility info how to get a car loan without credit check may not be entirely out of scope. Here is what you can do to get no credit check car loans available in the market.
check the same – https://www.bankbazaar.com/car-loan/car-loan-without-credit-check.html

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