Owning a car means a lot for many people. For some, it might be the pleasure of driving. For others, it might be for daily use, for business purposes or even for a livelihood. Whatever the reason, in a country like Australia, owning a vehicle makes life a lot easier. Although 92.5% of households in Australia have a car, according to the Australian Bureau of Statistics, if you are one with a bad credit history or no credit history at all, owning a car will be pretty tough. Here comes the need of getting bad credit car finance in Australia.
Not everyone can afford the expenses of buying a new car or any vehicle of their wish. Thus the purchases are made as borrowing through credit. They are based on an agreement that the borrower repays them later. But if one has experienced bankruptcy in the past or has used a credit card to make a purchase that resulted in failed repayment, that accounts for bad credit history. Not having a credit history or having a bad credit history becomes a burden when opting for a car loan. There are high chances that the loan application will get rejected. When money lenders know about the past credit history, they find it risky to lend money to borrowers with a bad credit history. It is because there is no surety that the borrower will be able to repay the money. But this could work pretty well with financial assistance such as credit car finances.
Getting a car loan approved is complicated for people with bad credit history. People who are willing to lend money charge high rates of interest; thus, it becomes extra trouble for the borrower. Having a bad credit history does not mean one should be denied a car loan. Companies like Finance One offer bad credit car finances for people with bad credit history. Bad credit car finances are particular loans that work the same way as a standard car loan except to help people with an imperfect credit history. Before opting for such loans, it is essential to look at certain things.
Things to consider when applying for a bad credit car finance in Australia
- Credit score: Credit score plays a crucial role in gaining bad credit car finances. Before applying for such a loan, one should be aware of their credit score and improve it. Paying down the debt reduces the debt-to-income ratio; that is, it maintains the balance between income and the amount to be paid.
- Choose the lender carefully: Before fixing a lender, it is necessary to get as many details about their services. For instance, interest rates, maximum loan amount, amount to be paid per month etc.
- Prequalify: Prequalifying with lenders before applying helps one to see if they qualify for a loan. Improving the credit score is a crucial step in pre qualification as it increases the chance to get the car loan approved without much trouble. It also makes the process a lot easier.
- Age and other requirements: One should be at least 18 years old and have a regular income to qualify for loans. As it will ensure the lender that the applicant will repay the amount. Income is also a key factor as it determines the amount to be approved as a loan.