Are you in desperate need of a car? But you either have no credit history or a bad credit history after missing repayments in the past? Well, fortunately, a bad credit history doesn’t prevent you from obtaining car finance!
Now, be wary, however, because there are some finance businesses who almost prey on people in unfortunate circumstances like these. They may charge excessive interest rates and fees, or impose difficult. When it looks too good to be true, just look closely, because there may be hidden costs buried in the contract.
There are safe finance options for those with a bad credit history
Before applying for a loan, obtain a copy of your credit report. Study it carefully to ensure all information it true and accurate, because sometimes, details might be missing that can actually work against you.
If you have current outstanding debts, try to settle them, or enter into a time payment agreement with the creditor. Having outstanding unpaid bills will work against you when applying for any kind of finance. A continual bad history will suggest to lenders that you are unlikely to repay the loan, making it an uphill task to approve finance.
The worst thing you can do is to try to cover up your history with false or misleading information. If you have made mistakes in the past, acknowledge them honestly and be prepared to demonstrate that you have learned from them.
If you are able to find someone to guarantee your loan, obtaining credit despite a bad history will be much easier. Demonstrating a history of saving and managing your finances since any debt default will also help. Other factors that may get you onside include a larger deposit, and avoiding older cars when requesting a loan.
Who do I go to?
Most lenders will refuse finance to someone they have had prior losses with. Because of this, you are best served to avoid applying to lenders with whom you had prior bad debts, even if you eventually paid them.
Consider using a finance broker to source finance for you. Brokers are experienced in explaining your history and presenting credible evidence of your ability to service a new loan. Not only will they fight your case for you, but they know which lenders are most likely to consider your application. Above all else, they know which lenders to trust.
Do make sure, however, that you don’t fall into the debt trap once again. Only take out a loan that you can afford to repay, the last thing you want to happen is to have another bad mark against your name.