How Do You Get Bad Credit Car Loans With No Deposit?
There are a couple of things which can help people get a bad credit car loans with no deposit. Here is what you need to do.
- Honesty is the best policy
When speaking to your lender, you need to offer them the most accurate, up to date and honest details about your current circumstances.
Hiding anything at early stages in the process will make things far more complicated and could even ruin your chances of getting a loan approved.
- Make sure your bank statements are at their best
We know it’s easier said than done but if you’re hoping to get a bad credit car loan with no deposit, you’ll need to have your bank statements in good order to show to a potential lender.
Going overdrawn is really not ideal as it will raise red flags for lenders. Aim for three months of good bank statements and time your application for the loan accordingly.
- Show evidence of stability
It can be very difficult to get approval for bad credit car loans with no deposit if you are also unable to show them any evidence of your employment history. If you are employed, having a good track record and regular pay slips to show to a potential lender will be a great advantage.
Similarly, evidence that you are living in one place on a permanent basis and paying rent each month will help in your credit application.
Can you borrow more than 100% of the car cost?
Good question, and one that’s difficult to answer. This may be possible in some cases, but it depends very much on the individual circumstance.
It also depends on the lender, so it’ll be important for you to seek out lenders who specialise in bad credit car loans with no deposit rather than a standard bank.
There are a number of different loan options which may be suitable for you. It’s also really important to consider that you may need up to 125 per cent of the car cost as you’ll have added extras to pay such as:
- Extending warranties
Traps to avoid when getting a bad credit car loan with no deposit
You may feel really lucky to be getting a car loan despite having bad credit and no deposit. However, it’s still important to be wary of traps you can fall into and to be aware of potentially expensive pitfalls.
Expect to pay no more than 29.9 per cent interest – this is already a very high rate, and you should not agree to pay anything above it.
Avoid no credit check loans
Despite what you might think, this is not a good sign. Car loan applications with reputable companies should feature a credit check so do not trust a lender who offers a no credit check loan.
Watch out for ‘introductory rates’
Some companies offer an introductory rate which is low and therefore seems very appealing when getting a bad credit car loan with no deposit. However, once the ‘introductory’ period is over, the rates will increase dramatically.
Having an idea of the rate throughout the lifetime of the loan will help you to budget properly and avoid the risk of missing payments or defaulting on your loan.
As you can see, it’s certainly possible to get a bad credit car loan with no deposit. This is great news for those who want to get back on the road despite having bad credit.
Be cautious, do your research and always speak with a reputable expert with experience in this type of loan before agreeing to anything.
For more advice about bad credit car loans with no deposit, talk to the experts at Loans For People With Bad Credit on 1300 769 384.
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