Why Car Loan Pre Approval Matters with Bad Credit

By Angela Monroe - December 19, 2018

If you’re searching for a car loan with bad credit, getting a pre-approval is a must.

At Loans for People With Bad Credit we always want to make sure you have the best chance possible of being approved for a car loan with bad credit. With our easy to use online pre approval form, we need just minutes of your time in exchange for starting you on your car loan journey.

The importance of pre approval

Pre- approval for a car loan helps you to understand how much you can expect to borrow with a bad credit car loan. It will enable you to work out which type of vehicle you can afford and to limit your loan applications to appropriate lenders.

If you try to enter into the process of purchasing a car without getting car loan pre approval, you’ll have less negotiating power and a minimal understanding of where you stand financially.

What you need for pre approval

There are a couple of things you’ll need to get pre approval including:

  • A copy of your credit score – always make sure you’re in the best financial state possible before you look for car loan pre approval with bad credit.
  • Personal documents such as drivers licence
  • Income information – showing evidence of income either through payslips or via your bank account will help reassure the lender you can pay back the loan.

Using your pre approval when purchasing a car

Once you have successfully got pre approval for a car loan, you can leverage this to get the best deal for you.

Speak to your lender about the amount you have been approved for and discuss how they can help you to get the right car loan for the vehicle you want to purchase.

Unfortunately, bad credit loans often come with high interest rates but these shouldn’t be too extreme and you’ll want to make sure you get a fair rate. If you’re feeling unsure or out of your depth, ask Loans for People With Bad Credit to help in judging.

Moving forward

Here are some top tips for moving forwards towards full approval and beyond:

  • Be organised – always have all your documentation ready. It’s useful to have taken photocopies of these in advance in case you need to send any off or submit copies. Doing this in advance will avoid unnecessary delays and ensure you can give the lender what they require as and when they need it.
  • Know your finances – it’s important that you’re up to date with where you stand financially. Too many people with bad credit admit to not checking their credit score. Don’t bury your head in the sand about bad credit – there are lots of things you can do to improve your score and it’s a matter of confronting things head on.
  • Pay back loans – if you have existing debts or loans, make sure that you pay these back on time. If you need to set up a direct debit or reminders in your calendar to make this happen, do it. You can’t risk making your bad credit worse by defaulting on loans or making late payments.
  • Spend what you can afford – there’s no point getting a car loan for a vehicle that is totally out of your price range. You’ll put yourself under financial stress paying back high interest rates and large monthly repayments. Spending what you can afford means that you can improve your credit rating step by step and increase your chances of borrowing more in the future.

Ask for help with bad credit car loans:

Loans for People With Bad Credit have years of experience helping people with bad credit to get the car loans that they need. If you need help getting pre approval we can help you start your car loan journey with bad credit.

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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