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Australians who have less-than-perfect credit history still need access to finance, and a common reason for seeking a loan is to buy a new or used car. If you fall into this category you still have a number of options to help you finance a car, and these include secured and unsecured loans. Secured loans tend to charge lower interest as it’s less of a risk for the lender to take on.
Which of these lenders will actually accept bad credit borrowers? The lenders below will all accept borrowers who have a less than stellar credit history.
A typical bad credit loan is one you apply for from a lender that doesn’t follow the same stringent lending criteria as mainstream banks and credit unions. With a secured bad credit loan, you’ll have to be purchasing a vehicle that meets the criteria of the lender. This can be a new or used car; a used car will generally need to might requirements for age and condition. If you’re looking for an older car or to purchase a caravan, motorbike or other vehicle, an unsecured bad credit loan might be an option to consider.
Having bad credit doesn’t mean you can’t get a car loan. A number of lenders in Australia are willing to offer you a loan even if you have bad credit. All you need to demonstrate is the willingness and the means to repay it. If you’re considering getting a secured car loan with bad credit, follow these steps.
Depending on your needs and you meeting lender’s eligibility criteria, you can consider financing a car using any of the following:
If you’re thinking about getting a bad credit loan to buy a new or used car, paying attention to the following aspects can help you find a loan to meet your needs:
Take some time to go through the following before you apply for a secured bad credit car loan.
While there is no guarantee of approval with any bad credit loan, it is important that you meet certain basic criteria in order to apply. You should, for instance, be over 18 years of age. You will need to be a permanent resident of Australia or an Australian citizen, and you it’s likely you’ll need to have a regular source of income. Some lenders consider Centrelink payments as income, although there are restrictions on this.
Find out which lenders approve Centrelink loans
As part of the application process, prepare to show documents that can verify your identity, employment, and income. You will also have to provide details about your expenses and liabilities.
Some car loan providers give their customers the ability to get pre-approval, which helps give you an indication of how much you can borrow.
How much time does submitting an online application take?
If you have ready access to the required information, you can usually complete your application in around 10 to 15 minutes.
How long might approval take?
Car loan providers normally go through the approval process quickly, with some offering conditional approvals in as little as two hours. In most cases, once you submit your application you can expect to hear about the status by the following business day.
If my lender repossesses the car, do I still have to pay any money?
If the money the lender gets by selling the car is less than what you owe, you might have to pay the difference.
Picture: Shutterstock
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