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Car loans and bad credit


Tips for Car Loans with Bad or No Credit History


For many consumers, the process of obtaining bad credit car loans can be intimidating or difficult. Individuals who have had credit defaults in the past may find it more challenging to find a lender willing to work with them to re-establish a positive credit history. Fortunately, there are a few ways to improve your chances of obtaining the financing you need to purchase a new or used vehicle, even if you’ve had credit difficulties in the past.

In many cases, making a sizable down payment or deposit on the car you want can improve your chances of obtaining financing for the vehicle. This equalises the risk between you and the lender, providing them with some assurance that you will not default on the loan and security for their investment. In some cases, a trade-in vehicle can serve the same purpose; this assumes that the trade-in is in good condition and represents an equivalently large investment on your part.

Selecting a vehicle that is less than seven years old increases your chance of obtaining financing from traditional sources. Many companies that offer bad credit car loans, however, can provide funds for vehicles that are older than seven years, and may even offer special incentives for newer cars in the form of lower interest rates or more favourable terms.

A number of Australian auto finance companies specialise in providing bad credit car loans to consumers. These companies are often willing to work with you to help you purchase the car you want, even if you’ve been denied by other auto financing companies in the past. Your interest rate will typically be higher than for applicants with good credit, but with a few years of good payment history you may even be able to refinance your loan to a lower rate, saving you money over the life of the loan.

By selecting your lending company carefully and working to improve your credit history, you can often get a better deal on financing. Saving up for a sizable up-front payment or using a trade-in vehicle for your down payment can make a big difference in your chances of loan approval for the vehicle you wish to buy.

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