20 Point bad credit car loan checklist

By Angela Monroe - March 27, 2018

If you have bad credit, you might take the risk of applying for an online loan so that you don’t have to talk to anyone about your financial situation. However, in most cases, these loan applications get rejected.

If you’re looking to apply for a bad credit car loan, you need to ensure that your application is complete before you submit it. You also need to provide all the necessary paperwork and documentation required for quick approval of your application.

If you’re not totally sure that you’ll meet the lender requirements, you should seek the help of a car finance broker to help you prepare your loan application, especially if you have bad credit. Professional brokers know what lenders look for in loan applications and they can help you arrange for all necessary paperwork.

Here are some of the things you need to do when you prepare an application for a bad credit car loan. By following this checklist, and you’ll significantly increase the chances of your loan application getting approved.

Bad credit car loan checklist – Dos

You should do a few things to ensure that lenders consider your loan application without rejecting it outright. These include:

1. Obtain your credit report and go through it carefully.

If you find any errors in your report, notify your credit bureau to rectify the errors. An error-free credit report will increase your chances significantly.

2. Calculate how much to borrow

This will depend on the car you want to buy and how much you’re comfortable borrowing.

3. Reduce all your unnecessary expenditures.

Consider your active subscriptions, cancel any you don’t really use or need,  and practice saving on a daily basis. This will help improve your current financial situation and also make repayments easier for you.

4. Calculate how much you can afford

Your surplus income each week is the amount that you can afford to pay regarding loan repayments. Make sure also to account for other unexpected expenses as well.

5. Reduce your existing debt as much as possible.

Clear your overdue bills and consolidate outstanding debts.

6. Save some money in your account before you apply for a loan.

This will give lenders the impression that you have some repayment capacity. This money will also be useful for insurance and registration costs.

7. Compare loans

Comparing loan options offered by different lenders for the best interest rates and make sure to obtain advice from a professional before applying.

8. Seek the advice of professional car finance brokers.

Professional brokers such as Loans for People with Bad Credit can help you find the right lender – one that will consider your application with your current financial profile. This will help you to avoid making an application that gets rejected, further damaging your credit score.

Bad credit car loan checklist – Don’ts

There are certain things which you must never do when applying for car loans on bad credit. These include:

9. Don’t apply for a bad credit car loan with multiple lenders.

Choose only the best lender and apply once. Multiple application rejections can hamper your credit score further.

10. Never borrow more than you can afford to repay.

Consider your income and apply for a loan amount that you’re comfortable with.

11. Don’t be dishonest with your application.

Don’t overstate your income, don’t hide any facts and don’t provide false references. If lenders find that your application isn’t truthful, they’ll reject your application immediately.

12. Don’t apply for the first bad credit car loan that you come across.

Several scams are going around and considering your credit situation; you really should avoid scams.

Bad credit car loan checklist – Documents required

Lenders will require several documents when you apply for bad credit car loans. These include:

13. Provide a copy of your driving license.

This verifies your identity and current address.

14. Provide your payslips

Payslips from the last three months as proof of your income if you’re an employee.

15. Provide your tax returns/notices of assessment/bank transactions

You’ll need alternative proof of your income if you’re self-employed.

16. Provide your Centrelink income statements

Some Centrelink payments can count as income for your car loan.

17. 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.

18. Provide your bank statements

If you’re unemployed, providing bank statements as your financial history and will also show lenders if you’re financially responsible.

19. Provide your personal information

This includes your residential address, contact details, your assets and your liabilities.

20. Provide references obtained from 2 individuals.

These personal references need to be someone who can vouch for your reliability. They must not live at the same address as yourself, or as each other.

These 20 important points you need to address before submitting your bad credit loan application. If you do all of these, then your loan approval chances will improve.

Consider the help of professional car finance brokers

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. Bad credit lenders are more likely to approve your application for a bad credit car loan if you have a good reason for your financial situation.

If you feel that going through your documents and the loan application process is too cumbersome, you should consider the help of professional car finance brokers such as Loans for People with Bad Credit.

We’re car finance specialists who help people with bad credit get car loans at the best interest rates. We have access to several genuine loan products offered by reputable lenders. When you approach us, we will assess your situation and connect you with the best lenders. We’ll also do everything we can to show lenders that you are financially responsible and that you can afford the repayments.

We’ve successfully helped many people like yourself obtain bad credit car loans in Australia. You can rest assured that our brokers will do everything to get your loan application approved.

Apply for a car loan on bad credit today!

Now that you have an idea of the loan application process for bad credit car loans, there’s no reason to delay. Just make sure that you follow the checklist provided above, and you’ll be well on your way to obtaining car financing.

To ensure that you get the best bad credit car loan at the best interest rates, turn to the specialists at Loans for People with Bad Credit. We’ll make sure that you get the best loan product for your needs.

To find out more about how we can help you get car financing on bad credit, get in touch with us today!

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.

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