Can I Get a Bad Credit Car Loan With Defaults in My History?
Getting a bad credit car loan with defaults in your history is definitely harder than if you have a clear credit history, but it’s certainly not impossible.
Speak to us today to find out how we can help you with a variety of bad credit car loans. We have years of experience dealing with people who have defaults in their credit history, and we work with a range of lenders who can offer bad credit car loans.
Having defaults in your credit history
It’s important to understand what a default is and it’s essential for you to know whether you have any on your credit history. If you’re unsure, ask to see a copy of your credit record and always check for any incorrect defaults, which should be removed.
A default is an overdue debt. This will usually be through a missed or late payment on a loan that you have taken. Defaults stay on your credit report for five years—even after you have repaid the overdue amount.
We can help you get started with a free credit check today.
Any current defaults?
You should consider whether you currently have any outstanding defaults in your history. If so, it’s worth trying to pay them off as soon as possible. If they are still on your credit report but you can show a lender that they have been paid, you may get a better deal on your bad credit car loan.
Why is it harder to get a bad credit car loan with defaults in history?
Lenders will always look more favourably at borrowers who have a good credit history with no defaults. Defaults act as evidence of how reliable or not you are in terms of being able to pay back the loan in a timely manner.
If you have defaults in your credit history, it means that you have not paid back previous loans as agreed with the lender – therefore you are a higher risk borrower than someone who has not defaulted before.
Options for getting a bad credit car loan with defaults in history:
Consider a hire purchase agreement
There are many different bad credit car loan options to choose from, and a Hire Purchase Agreement could be a good option if you have defaults in your history. With this agreement, you’ll hire the car from your lender but pay the purchase price off in full via monthly instalments. The reason this poses less risk to the lender is that the car remains the lender’s property so if you miss payments, they’ll simply take it away.
This type of lease is generally targeted at people with bad credit, so you should be wary of the rates and monthly repayments as these could be much higher than other loans. A non-status lease is a good option if you have defaults in your history as lenders will consider other circumstances aside from just your credit history.
If you have a close relative or a trustworthy friend who is prepared to help with a guarantor loan, it can be a good option for people with defaults in their history. Your guarantor will co-sign the loan which means they’ll be responsible for paying the bill if you can’t pay your loan. To be approved as a guarantor, it’s essential that your relative or friend has a clean credit history.
Speak to the experts
There are so many people with bad credit who we have helped to find the right lender for them. Having defaults in your credit history doesn’t have to mean that you won’t ever get a car loan again.
Consider this: you are looking for a bad credit car loan with defaults in your history. You need a car loan because you want to get back on your feet again, have a reliable means of travelling to work and to make enough money to pay off credit or get your finances back on track.
Getting a bad credit car loan with defaults in your history gives you a second chance. You’ll get the car that you need to turn things around, start earning money again and improve your credit score.
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