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Posted on 2017-12-08

Not sure if you qualify for your car loan?

If you know you have credit issues, you’re already a step closer to getting the finance you need. Many individuals are unaware of their credit health until the bank informs them a loan has not been approved due to poor credit. So good work on knowing beforehand!

Thousands of Australian’s get car loans with bad credit and they do this by working with flexible specialist lenders and experienced brokers who have more relaxed lending criteria than the big banks.

If you are looking around for a car loan, getting knowledge you can trust is very important. The right info can also be the difference in saving thousands in interest.

Here is some key information that may help you get a better understanding about your ability to get that second chance car loan across the line:

What is a bad credit or second chance car loan?

‘Bad credit’ or ‘second chance’ is simply a category of loans for individuals who are perceived as ‘higher-risk’ for lending due to information contained in the borrowers credit file.

Does bad credit affect the interest rate?

Yes, usually second chance or bad credit car loans have a higher rate due to the increased risk involved. However, this does not mean you can’t get a competitive rate. There are thousands of products to compare so it’s best to speak with a broker who will do the research for you.

What if I have defaults?

Many individuals wonder if they can still get a car loan if they have outstanding defaults such an amount owing for a phone plan or credit card. While the best case scenario is to have all defaults paid, this certainly isn’t always an option. You can still secure a bad credit or second chance car loan, you’ll just have to be willing to pay a higher interest rate if a product can be found for you.

Can I get a car loan if I have declared bankruptcy?

In almost most cases you cannot apply for credit if you are yet to be discharged from bankruptcy. But if you have been recently discharged, second chances do exist for you. If this applies to you, it’s best to talk to an expert consultant rather than applying for products online as lender policies for recently discharged borrowers vary considerably.

Have you made too many enquiries in the past?

Making multiple enquiries is a common mistake among borrowers. Not everyone knows each application made is recorded on your credit file despite the outcome of the application. If you know you have a lot of applications on your file, talking to a specialist lender is best.

The most important consideration to make before signing the dotted line of your bad credit or second chance car loan is to try give yourself the ability to compare at least 2 options, and don’t just go for the first product that comes your way.

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