How to Get Cheap Bad Credit Car Loans

By Angela Monroe - September 17, 2018

Cheap bad credit car loans

Whatever your reasons for having bad credit, it’s highly likely that at some point you’ll be looking to get a car loan. Many people with bad credit get disillusioned with the constant rejection they feel when applying for car loans with bad credit – however, it doesn’t have to be like this.

Bad credit car loans have a reputation for being expensive with very high rates of interest and fees. At Loans for People with Bad Credit, we don’t believe that this has to be the case.

We want to help you to find a cheap bad credit car loan that suits you.

What does having bad credit mean for your interest rate?

Lenders must look at your credit history when deciding whether or not to approve your loan application. If you have bad credit, you’re likely to encounter slightly higher interest rates and fees with the loan than if you have good credit.

The reason for the higher interest rates and fees is generally because a borrower with bad credit poses a higher risk to the lender of not paying the loan back in full. Your credit history does not represent you as a reliable borrower.

What interest rates can you expect?

Interest rates on bad credit loans will vary depending on your specific situation, as well as the individual lender.

It’s useful though to understand the following:

  • Excellent credit score: you can expect to pay around 3.2% interest rate on your car loan
  • Average credit score: you can expect to pay around 4.5% interest rate on your car loan
  • Bad credit score: you can expect to pay between 6.5%-12.9% interest rate on your car loan

It’s easy to panic and think that you’re going to be paying an incredibly high interest rate on your bad credit car loan – but we are experts at finding affordable loans that suit our clients, even when you have bad credit.

You can see the difference in interest rates that you might encounter with a bad credit car loan so we’ll take the time to make sure that you find a cheap bad credit car loan that won’t see you struggling to make repayments.

Top Tips when getting a cheap bad credit car loan

There are a number of things you need to look out for when you’re looking for a cheap bad credit car loan.

You should always make sure that you don’t get caught in a trap of having a loan with interest rates that mount up to such an extent that you struggle to make repayments. This could lead to you missing repayments or defaulting on the loan, which will result in you adding to your bad credit rating and struggling to borrow money again in the future.

You need to be as honest as possible with your lender. Many lenders who we work with us are willing to give people a second chance, but it’s essential that they have the most accurate information so that they won’t discover things further down the line that you’ve tried to hide. Withholding information will almost inevitably lead to bigger issues.

Keep your employment stable if possible. You’re always more likely to be approved for a cheap bad credit car loan if you can show evidence of regular pay and a stable employment history. If you are currently unemployed or have recently changed jobs, consider waiting until you have at least three months of pay slips to show to a potential lender.

Know your credit history. This is important and it’s easy to do – you can access your credit rating online for free. Once you know what your credit rating is, you can check for any errors and also be on a better footing as you’ll know where you stand when it comes to talking with lenders. We can help you with a free credit check.

Get a cheap bad credit car loan today

Loans for People with Bad Credit are waiting for your call. We can handle your cheap bad credit car loan application quickly and efficiently.

We’ll be with you every step of the way to guide you through the whole loan process. Find out how we can help you get the right cheap bad credit car loan for you.

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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