Applying for a bad credit car loan fills many people with apprehension. What can you do to make sure your bad credit car loan gets approved? We’ve put together five ways to make things easier.
1. Put yourself in the lenders’ shoes
Lenders specialising in car loans are genuinely trying to help people. They WANT to see as many people drive away in a car that will help them get around, drive to jobs and ferry their family to school and other commitments. The first thing you should do? Put yourself in the lenders’ shoes – they want to lend to you, but they need assurances that you can pay them back and on time. They don’t want to say “no,” and everything you do to make their lives easier reflects back on you. Read our interesting article on why lenders need to check your credit history here.
2. Pay down debts and try to save
First things first – before you’re in a position to take out a car loan of any kind, you should be able to pay down as much debts as you can and try to save money, little by little. This goes a long way on your application, especially if your bank statements reflect your efforts. An ability to save means you can afford car loan repayments and other car expenses like insurance.
3. Work and residential stability
One aspect a lender or financier will look over is your income and residential situation. If you’ve moved around a lot, it looks like you are at risk of being a “fly-by-night,” skiving off and never paying back the loan. If you have a steady income and live in one place for a significant amount of time, it reassures the lender you can handle paying back a car loan.
4. Look at your credit history first
Before your lender does a credit check, it’s wise to find out what’s on your credit history first. If you have bad credit, it may have defaults and other information that harms your credit rating. But in some cases, it could contain errors that incorrectly decrease your financial standing. You will have to find these mistakes and fix them yourself. Read our article on no credit check car loans here.
5. Honesty is your best policy
Applying for a car loan is a long-term business transaction. You build business on one solid foundation – trust. Don’t give false information or mislead your potential lender. Give your lender every reason to say “yes” by proving you’re a good candidate for finance. Pay down debts, show them a stable work and residential history and fix your credit history if it has errors. It all helps your chances of approval!