Fincar May 30, 2024 No Comments

We here it time and time again here at Fincar.

A story where someone once blew it when it comes to their finances, and that they’re never going to be accepted for a loan again? Now you’re in the market for a new car, and you’re wondering what are your options? Do you have to sell the roof over your head just to have a car to get around, or can you make ends meet through some other means?


Confronting Bad Credit

First things first, you need to be cautious before you sign on the dotted line for any loan. Don’t rush into anything, even if you think that this is your only chance. If anything, you’ll be better off taking the bus or using your bike for a few weeks than letting yourself in for years of financial misery.

One thing that you need to be prepared to face if you have a bad credit history is that you are likely to pay interest at a much higher rate than borrowers with better credit histories. However, this rate shouldn’t be excruciatingly higher, you’re looking at a couple percentage points higher. That’s a lot, but we’re not talking about double the market rate here.

Be sure to clarify anything that you’re not sure about. There’s no such thing as a dumb question when you’re trying to understand a loan, and if the person you’re dealing with disrespects your question, or doesn’t answer it, walk away and take your business elsewhere. Whether it be repayment dates, understanding borrowing capacity, and so forth – ask, ask, and ask!

One thing that you should never do is agree to anything that involves a loan approval fee. This means that you have to pay to submit the loan application, regardless as to whether it is successful or not. On the other hand, most companies will have a loan processing fee of some sort, which is different. But an application fee, that should sound warning bells.

At the end of the day, if you haven’t got the best credit history, don’t despair. There’s always hope, and you can still secure a loan, as long as you put your best foot forward and provide the lender with as much certainty and confidence as possible. The best way to do this? Naturally, if you can get a guarantor on your side to back the loan, or put up something as collateral against the loan, that will help. Otherwise, show prospective financiers that you can manage repayments at the higher interest rate.


The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.