Do You Have Bad Credit But Need a Car Loan?
A bad credit car loan can be seen as your first step on the road to repairing your credit history. Pay your bad credit car loan back efficiently and you’ll be proving your reliability and ability to make repayments in a timely manner. You need to do a couple of research and planning if you need a car loan with bad credit.
There are a couple of things you need to consider when searching for a bad credit car loan with low interest:
Get your facts straight
You need to know exactly what your credit score is. You’ll also want to have any possible documents which may potentially help you to gain the best bad credit car loan available. And these documents include:
- Records of any recent employment
- Evidence of Regular payments and repayments that you make.
- Bank statements – you should ensure not to be overdrawn wherever possible
- Proof of residential status
Work out exactly how much you can pay back per month. You can’t risk defaulting on a bad credit car loan. You really should see this as your last chance to make things right again.
Beware of low interest rates
Just be aware that lower interest rates aren’t always a good thing. Review everything critically and if you’re unsure, ask for help. We have dedicated staff with years of experience who can help you. And give you advise to get the best bad credit loans for you. We also have access to over 30 lenders ensuring that we have the best access to the best deals.
Sometimes, low interest rate loans have higher fees, which could ultimately result in your paying more in total. Although you’ll want to avoid very high interest rates, don’t be fooled into accepting lower interest rates without fully investigating the fees first.
Have a look at the table below to use as an example to help you understand more:
|Loan Amount||Interest Rate||Monthly Fee||Monthly Repayments||Total Paid (5 years)|
*Not actual rates
Focus on you
It’s very easy to continually compare what other people in your situation have been given for their bad credit car loans. However, each case is extremely different and will depend entirely on your personal circumstances and your individual credit history.
Interest rates depend on your personal financial status so try not to have preconceived expectations about the rates of interest that you may be likely to receive.
The best thing you can do is be completely honest with your lender, and try to build up your credit score in the approach to getting a bad credit car loan – this could mean waiting until you have 3 months of regular repayments to show on your bank statement, or holding off on getting a new credit card or switching homes.
Consider your down payment
If you’re able to, presenting your lender with a good down payment can help to offset the interest, tax and fees as well as widening the variety of vehicles you can choose from.
Only offer a large down payment if you can genuinely afford to do so – do not put yourself into financial difficulty and make sure that you will still be able to make all repayments necessary on your bad credit car loan.
Go back to basics
You need to understand that bad credit car loans must be repaid and should be seen as your first step to rebuilding your credit history.
As such, you may need to sacrifice some of those luxury items you’ve been wishing for. The loan amount you will be approved for with bad credit is unlikely to cover top of the range interiors or the best speakers for your music collection.
Be realistic – only buy what you can afford and don’t risk defaulting on payments just for the sake of some leather seats!
Speak with the experts
Sadly there are a lot of companies out there who will take advantage of the fact that you are desperate to get a bad credit car loan. You need to be extra careful about scams and schemes that simply sound too good to be true.
Always take your time to read over any paperwork, do all your background research and ensure you deal only with the experts. Finding a reputable lender who has your best interests covered is the best thing you can do for yourself.
For more advice on bad credit car loans, talk to us on 1300 769 384.