- Have you been late on making your bill payments?
- Do you have a bad credit rating?
- Have you defaulted on your bills?
- Have you been bankrupt?
- Have banks rejected your loan/ finance request?
If the above statements are true for you then you are among those who have a bad credit rating; however, if you want to get a second chance for your car loan, you certainly can. Yes, you read it right! You are still eligible for a second chance car loan through a secured bad credit car loan.
How does a secured bad credit car loan work?
A bad credit loan is one that you apply for, from a lender who doesn’t follow the same strict lending standards as conventional banks and credit unions. With a secured bad credit car loan, you’ll have to be purchasing a vehicle that meets the criteria of the lender. This can be a new or used car; a used car will typically require going through the entire process and qualify with regards to its age and condition. Suppose, you’re looking for an older car or want to purchase a car, motorbike, caravan or any other vehicle, a secured bad credit loan might be the right option for you to consider.
How you can get a secured car loan with bad credit
If you have bad credit, it doesn’t mean you cannot get a car loan. As a matter of fact, there are many lenders in Australia who are willing to give a loan to you even if you have bad credit. From your end, you need to prove that you need the loan and willing to repay it.
Follow the steps mentioned underneath if you’re looking at obtaining a secured car loan with bad credit.
- Evaluate the offerings you get from different lenders who provide secured car loan to people with bad credit.
- Check whether you meet all the minimum eligibility criteria of the lender.
- In order to determine how much you can afford to pay in your repayments, you need to work on a budget systematically.
- After comparing your alternatives, if you are sure you can repay the loan amount, you can go ahead for car finance option.
- If your application is approved and you receive the loan amount, next you have to make sure you have enough money in your account so that you can make timely repayments.
Vital points you should consider before applying
Before you apply for a secured bad credit car loan, go through the following points:
- Never ever miscalculate your budget and refrain from applying if you feel you may not be able to keep up with timely repayments.
- Attempt to keep the loan term as short as possible. The reason being – the longer the loan term, the more interest you will pay.
- Before establishing the functionality and use of the add-ons such as loan protection insurance, mechanical breakdown cover and gap cover, refrain from signing up for them.
- Ascertain if you’re allowed to make extra repayments and whether they will draw any penalties and whether there is a limit to such extra repayments.
- Your car will depreciate in value over the period of time, so don’t assume you can repay the loan amount entirely by just selling the car.
How to find out whether you are eligible or not for second chance car loan?
Although with any bad credit loan there is no guarantee of approval, still it is imperative that you fulfill certain basic eligibility criteria so that you can apply. For example, you should be over 18 years of age; you should be a permanent Australian resident or an Australian citizen and you need to have a regular income source. For further information and advice, you can go through Tips to Get Car Loan with Bad Credit.