Applying For a Car Loan with Bad Debt

  • Posted 11 Feb
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Applying For a Car Loan with Bad Debt

No matter how careful you are in planning your finances, sometimes life deals us a bad hand. Bad debt can happen to anyone and will make your financial situation a little tricky, but that doesn’t mean you should be left without options when it comes to obtaining a car loan.

You deserve a second chance to finance your vehicle. After all, having a car is an essential tool in getting you from A to B and lending companies fully understand this.

If you have bad debt and are looking to get a car loan, the following tips are tailor-made for your situation.

1. Understand Your Financial Situation

Bad debt, as long as you tackle it and you don’t stick your head in the sand, is manageable. Before you apply for your loan, have your financial affairs in order and know your situation inside and out. Know exactly what your monthly incomings and outgoings are, including the debts that may be a little difficult to look at.

2. Show Positive Signals

Getting a loan at a decent rate is possible, even with bad credit. This is particularly true if you’ve already done some heavy lifting to show you’re moving in the right direction. Companies are willing to lend to those that have hit a bad patch – as long as you show that you’ve been on the straight and narrow in your financial history for a while.

3. Have Sufficient Income

You will need to be able to prove that you have enough money going into your bank account to cover all of the necessary payments. You will usually need to provide bank statements from the last three months, so make sure they are in order before you apply!

4. Be Completely Honest

When speaking to a lender, disclose your financial situation in detail. Hiding anything will only work against you, as the advisor will not be in a position to offer you the best deal available. Remember, the loan should easily fit within your monthly budget.

5. Approval Isn’t Necessarily a Good Thing

Most individuals with bad credit will be so eager to get their hands on a car loan, that they won’t consider the small print of their new financial arrangement. This can be a big mistake that will land you straight back at square one.

Approval doesn’t mean you should take the car loan, regardless of the circumstances. There are plenty of decent options out there – don’t sign up to a bad loan just because you’ve been accepted. Do your own due diligence and read the fine print.

Lenders that Understand

If you have had your dose of bad luck and need a car loan, then Australian Credit and Finance can help. The company has access to over 13 lenders in the region, meaning you’ll always get a deal that makes sense for you. Whether it’s a car loan to buy a vehicle outright or a leasing option instead, Australian Credit and Finance will find a solution to suit your needs.

There is no obligation whatsoever – simply call 1300 735 557 for a friendly chat with one of the many car loan experts available. One of them will be happy to give you the A to Z of what you need to know in order to successfully apply for a car loan.

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