There are many people with poor credit who are looking to buy a car. Unfortunately, this means that they are most likely going to have trouble getting approved for finance. Auto loans aren’t the easiest thing in the world to get even when you have excellent credit, but someone with extenuating money woes might be looking at some tough luck when it comes to getting an auto loan. Don’t give up hope just yet though, because there are options you can look into that will hopefully have you rolling in your new car sooner rather than later.
1. Look for special car finance deals
Just like with any loan, some companies will be willing to give you more leniency than others on qualifying criteria like credit history and maybe even employment status or income. This is especially true if you are buying a cheap used car that does not require much of an investment from the bank; they can afford to be a little more forgiving in these cases. Every company will have their own rules when it comes to getting approved though, so you should start by comparing car finance deals online and check out the best car loan rates with Driva.
2. Check for any errors on your credit file
According to a recent report from the Australian Securities and Investments Commission, one in five Australians has an error on their credit file. In fact, it seems as though those aged 35 to 44 are most likely to be affected by this. It’s a good idea to check out your credit file for errors before you apply for finance because having these points rectified can have a big effect on approval chances. While you’re doing that, why not also see if there are any credit providers that will give you a special deal for having an error-free credit file?
3. Look into guarantor car finance
The majority of auto loans will require that the borrower is earning enough to cover living expenses and repayments, but there are still some places willing to give someone with bad credit help regardless. If this applies to your situation, consider asking if your parents are willing to be guarantors on your loan so you can at least get the car of your dreams. If this isn’t an option either, there is another route you can go down instead.
4. Try not being the main borrower
Here’s a thought – what if you didn’t have to worry about money problems? What if you could get accepted for a car loan without having to have good credit? It might sound outlandish, but there are still companies out there willing to give loans to people who don’t have sufficient income or bad credit. You should see if your bank will allow you to be listed as a secondary driver instead of the main one so you can actually get your hands on that car.
5. Look into personal financing options
Personal financing is defined as a non-collateralized loan taken out by an individual for personal use that may or may not require security depending on the financial institution providing it. Personal finance companies are also known to give people with bad credit loans without collateral at higher interest rates, but this is still an option if you want to get approved without having to worry about credit history.