“Super quick, I got lots of offers. All I had to do was choose which one! I went with Wisr because they were the cheapest. Thanks” - Angela
Firstly, it’s definitely possible.
These days lenders have access via your credit report to see:
Your credit score and history shows lenders your past performance with other companies.
You'll need to be able to give the lender an understanding of why you had missed payments or defaults.
And of course, your situation may be much better than what it was previously. You may have a new job, be earning more money, paid off some defaults and kept up with all your commitments.
If this is the case, getting a car loan with bad credit should be achievable.
For instance, if you have paid your defaults off, that is looked at more favourably to unpaid defaults.
Also in this context, a default to an energy company, or a gym for instance is a lot more favourable to a default to another finance company.
For people with bad credit, lenders are going to want to understand two things:
If these two things check out, a lender will be able to offer you a bad credit car loan, but it's likely going to have higher interest rates and some fees attached.
This is because you're being considered higher risk than someone who has excellent credit.
If you want to see if you're eligible for any loans you should try our Money Matchmaker™ it won't affect your credit score.
Adding a 20% deposit will be viewed favourably by lenders and significantly increase your chance of approval.
For people looking for a car loan with a bad credit history, the good news is, there are lenders who specialise in financing cars for you.
Lenders love boring, or should we say, consistency!
They love it if you've had the same job forever and have been at the same house since you first left home.
Here's an example of how your employment history can influence your approval.
You can qualify for car loans with bad credit in Australia if you are:
Often people find out from a lender declining their application.
If this happens, you need to request a copy of your credit report from one of Australia’s three credit bureaus:
Once you’ve got your credit report, you’ll be able to see where any slip-ups in the past have happened.
Sometimes, you’re able to dispute these.
Some people may even have bad credit without realising it.
Lenders will look at all defaults on your credit file when assessing an application, which will include everything from unpaid telco bills to credit card defaults and more.
There are a couple of types of bad credit and not all are created equal in the eyes of lenders:
With these 2, financial defaults are frowned upon and will make it the most challenging to get a bad credit car loan.
There’s one more thing to keep in mind when looking at your credit file: whether any defaults are paid or unpaid.
Paid defaults show you have made an attempt to clear your debt and are taking responsibility for your finances are the preferred type of default.
With unpaid defaults, depending on what they’re for exactly, a lender may ask you to make good on this before they extend a loan to you.
You’ll need to wait until you have been discharged from your bankruptcy or part IX debt agreement for a minimum of 12 months before you can apply for a bad credit car loan.
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