If you dread having your car loan application rejected because of your bad credit, you should know that having a bad credit is not that uncommon. While it’s not the end of the world to have a bad credit, still, it can complicate things for you quite a bit, be it the case you need a loan, such as car finance. Ideally, you’d have time to get your bad credit sorted out, but what if you don’t have that luxury? In that case, you need some tips on how to secure a bad credit car finance deal in 2016.
Pay existing debts
If you want to get approved for car finance, before approaching a lender, you need to make sure you prove him that you are currently paying off existing debts. This will show that your financial situation is stable. In the same respect, it will display that you are eligible for obtaining car finance, being capable of paying for the expenses car ownership imminently implies.
Don’t be set on one model
Keep your options open, when it comes to the car you are looking to buy. Being inflexible on this matter will drive the price way up, and it will make it significantly harder for you to get a finance deal and end up with the car you want. Be open to diversity, because the dealer may not even be able to offer you anything but a limited selection of vehicles. The priority is to get the loan; the model can vary. You should take into consideration the costs of the vehicle, including stamp duty, registration, insurance and maintenance costs.
Secured vs. unsecured loan
In the case of bad credit history, opting for a secured loan might grow your chances of getting your car finance approved. To be more precise, a secured car finance will imply your car as security in worst case scenario you won’t be able to make the necessary repayments in time. This will possibly contribute to determining a lender to accept your car finance application.
Consider a guarantor
If you have a person who can guarantee that you will pay off the loan in time, this will positively influence the lender to accept your loan application. You should factor in this alternative as well.
Avoid multiple applications
It is crucial that you don’t fall into the popular mistake of sending in multiple loan applications. Sending in an application and afterwards getting rejected will have a detrimental impact on your credit history, and will worsen your situation. If you get rejected several times, you will deal with increased difficulty when obtaining car finance.
Check your credit history
Believe it or not, sometimes, your credit history might contain mistakes that don’t accurately mirror your financial situation. Therefore, you should consider having your credit history checked by opting for the assistance of a credit-reporting agency. Therefore, securing a bad credit car finance deal in 2016 should not be as difficult as it sounds. While you may encounter some difficulties, the bottom line is that you should be aware of the options you have at your disposal, and, consequently, make an informed and wise decision.