Getting a car loan on bad credit can be a challenge. You may be in a situation where you really need a new vehicle, but your financial status is working against you. There are options available for people with poor credit ratings. The first step is ensuring that you can meet the regulatory requirements to be eligible for a loan.
Getting A Car Loan On Bad Credit Means You Need To Meet Car Loan Regulatory Requirements
While many people may be eligible for a car loan and not know it, there are some cases that may not meet the regulatory requirements. First, you cannot obtain financing if you are bankrupt or are under a Part 9 agreement. You also must earn more than $400 per week and not be a non-resident in the country on a student or holiday visa. Those who are receiving sole Youth or Newstart allowance payments are also not eligible. If none of those applies to you and you meet the specified affordability checks, terms, and conditions, you may qualify for a car loan. Once you determine eligibility, it’s time to prepare for the application process.
Tip 1: Be Honest
You won’t be able to hide things that are on your credit history, so the best approach is to be honest. It’s best to supply all the information up front rather than waste time just to be turned down later due to inaccuracies or known issues.
Tip 2: Check Credit
A credit check is a common part of the process when getting a car loan on bad credit. Make sure you review your history and score first before you apply. There may be items on there you could take care of to improve your standing and give yourself a better chance at approval.
Tip 3: Live within Your Means
The lender will want to know that you are living within your means. That means you are supporting yourself and paying your debts without relying on credit or borrowing. It’s best to try and save some money as well, even if it’s only a small weekly or monthly amount.
Tip 4: Know Your Repayment History
If you have loans or lines of credit, this will also be reviewed. The lender will want to see that you are paying reliably before they agree to finance your car purchase. Make sure you have a good repayment history going back as long as possible. The longer, the better!
