Car loans for people with bad credit, also simply known as bad credit car loans are second chance loans available for people with low credit score and those who have black marks on their credit report but can repay a loan.
Credit history and reports play a big role in securing financing and mortgages in Australia. Yet, do not have to let a bad credit rating deprive you of securing a loan. Car loans with bad credit are available for people with bad credit. So how do you qualify?
Requirements for a Bad Credit Car Loan Application
Full documentary bad credit car loan applications require the following documents:
- A copy of your valid personal identification
- 2 recent pay slips
- A letter from your company confirming your employment
- Latest group certificate
- Tax Assessment Notice with 3 months recent loan and personal bank statements
Self-employed individuals may also apply for a second chance car financing. They need to prepare the following documents together with their application:
- Latest 2 years of Tax Returns
- Tax Assessment Notices
Low Document Bad Credit Car Loans can also be availed by Self-employed individuals as well as entrepreneurs and small business owners. They will have to submit the following documents along with their bad credit car loan application:
- ABN registered for 24 months, although some lenders accept ABNs with a minimum of 1 year or 12 months
- Declaration of position
- Bank statements
- Business activity statements
- Accountants information
Are You Qualified for a Bad Credit Car Loan?
Different banks and lenders have different qualifications and requirements when receiving and approving bad credit car financing. Although most requirements are the same documents for application, qualifying for a loan differ from one lender to the other.
To increase your chances of getting your bad credit car loan approved, you can follow these tips.
1. Be Honest with Your Application
You can never bite more than you can chew. Present authentic documents and be honest with your current financial situation. You might lose the chance of getting a bad credit car loan approved if you fail to submit correct and accurate details about your finances. If you do manage to get approved with false documents, you will be having a hard time catching up with payments if your actual financial situation is different from what you presented to your bank or lender.
2. Review Your Credit History and Financial Documents
To be able to reflect on your actual finances and be able to identify where you are at in terms of your finances, it would be advisable to review your credit report and other financial documents – mostly your requirements – when applying for a bad credit car financing. If you are having a hard time translating your financial data into a summary you can understand, you may seek help from your accountant.
The good thing with reviewing and revisiting your credit file is that you get to remove items that can affect your application negatively. However, you should be careful with what you remove from your credit report. Accounts that are already closed – say debts or loans that are already paid off – should not be removed from your file if these items were paid on time and diligently. This can be the basis of how reliable you are as a payee, thus a good impression on your end from your bank and lenders.
3. Pay Outstanding Accounts and Debts
The key to getting qualified for a loan is creating and maintaining the impression that you can repay a loan despite the black marks on your credit report. Repaying personal loans, credit card debts and other loans prove that you are taking steps in becoming a better person in terms of your personal finances. You might want to get a debt consolidation to save on interest rates or simply pay off debts you can afford to close.
Eliminating debt also gives you access to more cash in the future. The more you have and the less you must worry about paying back your other loans, the less risk a bank or lender will see in you in terms of paying back a second chance loan.
You Can Qualify for a Bad Credit Car Loan
Loan repayments can be quite heavy on the budget. Minimizing debt makes it easier for you to repay a car financing loan. You can also improve your credit rating the in the process, thus better chances of getting approved despite bad credit histories and poor credit to worry about.
There are financing options available for you even with bad credit on your file. Even if your credit rating is not sparkling clean, you can still find a suitable financing option for you.
Get the best financial decisions for your personal circumstances with Intellichoice. With more than 15 years in the business, we can find the perfect lender with the best rates and interest rates perfect for your needs and financial situation.