Bad Credit Car Loan Requirements

By Angela Monroe - March 29, 2022

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Did you know that applying for a bad credit car loan is fairly straightforward? All you need to do is submit the required information and allow a broker to work their magic.

However, things can get complicated when lenders need more details and paperwork and you find yourself scrambling to odds and ends needed.

We take a closer look at the paperwork you need when you apply for a bad credit car loan. Before you apply for a bad credit loan, make sure to arrange all the paperwork you need.

Bad credit

If you’re not sure whether you have bad credit or not, get a credit check. It doesn’t affect your credit file by simply viewing it and you have a chance to correct any wrong or missing information.

Furthermore, some people think they have bad credit when they actually don’t. If you’re not, give the team a call and go over your options – simply knowing can be a huge help and help you fix things.

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Documents required for bad credit car loans

Lenders (like banks) look at a few specific things before approving a bad credit car loan. These include your credit history, your current financial situation and your repayment capacity. 

Basically, lenders need to know:

  • PAST – did you repay previous loans without any problems?
  • PRESENT – what is your current financial situation?
  • FUTURE – do you have enough surplus to pay off a new loan into the future?

Without answering these questions, lenders might decline an application.

When you apply for bad credit car loans, lenders will ask you to provide some specific documents.

Typical documents include the following:

  1. ID

This is a requirement for all car loan applicants. Regardless of whether you’re applying for a standard car loan or bad credit car loan, lenders will ask you to provide a copy of your identification along with your loan application.

This could be a driver’s licence, passport or other government issued photo ID.

  1. Recent payslips

This is a requirement for most car loans. Lenders will check your payslips as proof of your income. Most lenders will ask you to provide this even if your credit history is perfect.

If you’re currently paying for uniform or something else that is temporarily deducted from your pay, simply let your broker know.

  1. Tax returns

If you’re self-employed, lenders will usually ask you to provide your tax returns over the past year or so. This will give lenders an idea of your proof of income and can be a simple substitute for payslips for self-employed people.

  1. Notices of assessment

Self-employed people may also submit notices of assessment as part of their financial statements. Notices of assessment can also work as proof of income if you are applying for a low doc loan.

  1. Bank statements

You’ll usually need to send in three months of bank statements. Your bank transactions will give lenders an idea if you’re financially responsible or not by showing if you regularly make cash withdrawals, gamble too much or live too extravagantly for a new loan.

These are typically sent online and do not need to be printed or emailed.

  1. Centrelink income statement

If you receive Centrelink payments, lenders will ask for your Centrelink income statement. This is because many lenders consider some Centrelink payments as viable regular income.

Note that NewStart/JobSeeker and Youth Allowance can not be used as income to support a loan.

  1. Mortgage details

If you have a mortgage, lenders will require you to provide the details as part of the loan requirements. This will give lenders an idea of your outstanding debts.

Usually with bad credit loans, you’ll have to provide a statement, but sometimes you can simply tell your broker the scheduled payment amount and amount owing.

  1. Credit card / other loan details

If you have any existing loans, you will need to provide all details to lenders. Again, this will give lenders an idea of your existing debts.

Sometimes, if you have too many, refinancing might be a good option. Refinancing allows some people to payout multiple existing loans with one larger one and get better terms. For example, lower rates, one scheduled repayment rather than several and a longer loan term so a lower scheduled repayment.

get a new car

How Loans for People with Bad Credit can help

At Loans for People with Bad Credit, we know what lenders look for in loan applications before approving bad credit car loans. 

When you approach us, our consultants will help you in every way to get your car loan approved. While we’ll help you arrange for the documentation you need, our consultants will also make sure that your loan application is presented in the best possible way to lenders. 

The team is here to help you obtain a bad credit car loan smoothly and efficiently.

Apply for bad credit car loans today!

There’s no reason to worry if you have bad credit – you can almost certainly still get a car loan. 

Just make sure to arrange all necessary documents and provide them to lenders with your application.

Call us to learn more about bad credit car loan requirements 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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