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Have Bad Credit And Need A Car Loan? Here’s 5 Tips To Help Find A Bad Credit Car Loan Right For You

Bad Credit.

These two simple words can cover such a huge spectrum of situations. In Australia, if you have “bad credit” it could be as simple as one missed payment on a utility bill (such as phone, electricity, water etc) or as severe as having declared bankruptcy. If you are somewhere in-between and are searching for a bad credit car loan then here’s some very useful information to help you understand if you will be successful or not with these specialised lenders.

TIP ONE

Bankruptcy: If you have ever been unfortunate enough to have declared bankruptcy you need to be prepared for continual knock backs. There is virtually no lender that will consider lending to you if you have entered into bankruptcy in the past 12 months. Find out the exact date you declared bankruptcy (this can be done by obtaining a copy of your credit report through Veda Advantage) and make note of when it will be a full year. Only then should you considered applying for a bad credit loan and obviously you must have made many changes to the way you handle money/finance. You could contact a bad credit lender just prior to the anniversary purely to find out what their policies are surrounding a declared bankrupt. This way you can start getting organised for what you will need to provide as you must be prepared to be highly transparent and forthcoming with all information.

TIP TWO

Security: “Security” is what you intend to provide to secure your bad credit loan. As a guideline most bad credit lenders will insist on security (being the car you are trying to buy) if you apply for more than $3000. If you already own a car and are just looking to get a bad credit loan you must understand that if you already have a loan secured by your car, you cannot use the car again for a second loan. This is important – you can only have ONE loan against any ONE car. If you are applying for less than $3000 the lender may not insist you provide the car as security but just be aware that by offering the car as security will generally mean your interest rate will be lower.

TIP THREE

Employment: You cannot expect to get a loan if you do not have a job. If your only source of money is from the any of the following government hand outs then there is no point applying for a loan as no lender will accept these:

  • newstart or youth allowance
  • aged pension
  • disability support pension
  • austudy

If you do have a job, also be mindful that you must be earning a minimum of $400 per week to be eligible for a bad credit car loan.

TIP FOUR

Bank Statements: You will need to have a bank account to be able to get a bad credit car loan. Generally you will be asked to provide 1 – 3 months worth of most recent bank statements to your prospective lender. Now go and pull out those statement and look at them as though you were a lender. If you were a lender you would want to see things such as:

  • the account is getting a regular pay deposited
  • it is always in credit
  • any loans you have mentioned on your application match the debits on your statements

If you were a lender you would not want to see such things as:

  • daily withdrawals from gambling organisations
  • obvious direct debits from a lender that you have not stated on your application
  • the account getting constantly overdrawn and being charged overdrawn fees

Be reasonable. Why would anyone lend you money if your statements show you can’t look after your finances even before getting a new loan?

TIP FIVE

Do “look” around but don’t “apply“: Don’t fall into the trap of filling in an application form on every bad credit lender website you can find, thinking that hopefully you will at least get one approval. This will definitely backfire on you. This is because each lender will do a credit check on you, so your credit report will show a handful of enquiries all close together which often rings warning bells to lenders. They see this as meaning you are applying, getting declined, applying again, getting declined again etc etc. By all means look at each website, get a feel for their lending policies, even phone them and see how you feel about the way they treat you over the phone! Then once you have decided on the one you like the best, then and only then should you click on that “apply” button.

Good hunting!

Non-Traditional Lenders Offer Bad Credit Personal Loans: Find Them in Four Easy Steps

Financial crisis and ruin is on the tip of everyone’s tongues these days. With the economy dipping further, job loss projected to continue and a few bad years behind us already, many people are faced with mounting bills and diminishing credit. If you find yourself in a similar situation in which you are near-hopeless in your quest for financial relief, there are still options out there.

Many people make the mistake of assuming that their only option in terms of loans comes from traditional financial institutions – banks and credit unions. However, there are additional resources that can be tapped in the form of non-traditional personal loans. These loans, which are given by private lenders may be able to provide the help you need regardless of your past bad credit history. Follow these four steps to find the right solution for you:

STEP 1: Review the Local BBB

A great first move is to look at your local lending options through the Better Business Bureau. This agency will provide important contact information and reviews of many non-traditional lenders who offer bad credit loans and review their business practices. The BBB website will provide information in the form of telephone numbers and addresses as well as ratings, complaints and other details about each lender you consider.

STEP 2: Stick with the Highest

The BBB will provide a letter grade ranking for each of the private lenders that you review. Similar to the grades given in school, A is an excellent business and F is a failing one. Make sure you only choose non-traditional lenders with a grade of B or better. Make a list of these options and then move on in the research process.

STEP 3: Website Research

One great feature of the BBB is that they will provide you with a direct route to each company’s website. Once you generate your list of potential private lenders, go to their websites to review the details of the packages and the deals that they offer, with special emphasis on their bad credit personal loan packages. You may want to write each company’s specifics down so that you can compare all the options side-by-side.

STEP 4: Contact the Lenders

Once you get a picture of each private lender’s different programs you need to make sure that you qualify for the ones that you want. Call each company and be honest with whatever service representative you speak with about your situation, your history and your current needs. This way they will be able to give you a clear picture of what their company can provide for you in terms of loan amounts, repayment periods, fees and interest rates.

Any non-traditional lender who cannot meet your needs or who does not offer bad credit personal loans can safely be eliminated. There are so many private lenders operating online today that with a little work you will find one who can help you and get you the money you need at a rate you can afford to pay.

Final Thoughts

There are many non-traditional lenders online these days who offer options in terms of personal loans for those with bad credit. With a little work and by following the four steps above, you can get the money you need despite your poor credit history.

Finding A Long Term Bad Credit Affordable Loan

Small affordable monthly payments for those with bad credit should not be a burden. Long term bad credit affordable loans should be budget friendly after having helped a borrower through a financially rough time. Short-term loans require larger payments, but they are off the budget books much sooner. Whichever choice, borrowers need to pay close attention to the terms of the loan by reading the fine print. Outrageous fees, outrageous interest rates and outrageous repayment terms should not be the burden of any borrower.

Borrowers should be aware of unscrupulous lenders.

Whenever there is someone needy and vulnerable, there are those around to prey on them. Borrowers should be careful about the amount and the depth of any financial information they release. Having divulged that, many so-called lenders disappear. On top of that, scamsters exist who will take upfront processing or consultation fees and disappear as well. Never work with a lender who tells you that they are doing you a favor by offering you a long term loan.

Taking a loan is not always the best way.

Taking a loan is a big obligation. Borrowers should be sure they have considered all the alternatives. Sometimes family members or friends who are financially okay may be able to help meet the financial need. After all, these loans are not subject to a credit or background check and are usually without cost. Just be sure the details are outlined and put in writing. Meet the obligation. Any other course is not viable in terms of alienating or creating bad blood with friends and family members.

Without security, loans often exact higher than usual interest.

Landing a loan when you have bad credit is difficult. Having no collateral or security to offer as a hedge should you default can result in extraordinary interest rates. Loans without security can sometimes approach loan-shark rates when it comes to interest. What can be worse is layering on fees and unrealistic repayment terms. These are many of the pitfalls that can drag a borrower even deeper into debt.

Homeowners stand to find decent rates and terms.

With equity in a home, a person can somewhat confidently ask a lender for a secured loan in spite of the fact that they have bad credit. The repayments are spread out over a longer period of time, they are more comfortable in terms of a family budget, and the interest rates can be very affordable. Be careful, of course. Should a default occur, the lender can seize the home and leave the hapless borrower on the curb along with all his belongings.

HELOC allows a homeowner a line of credit.

If a homeowner wants to opt for a line a credit, a Homeowners Equity Loan Contract is available. The value of the property is assessed and credit is extended to the limit that assessment allows. Money can be used until that benchmark is reached. At that point, the borrower starts to begin repayment as agreed to in the specifics of the HELOC agreement.

Borrowers should be careful when taking a long term bad credit loan.

Be sure to do plenty of shopping around should you absolutely need to take a loan. You want the most affordable interest rates and the most comfortable repayment terms. You want the best deal. Look out for hidden fees, increases only mentioned way down in the fine print, or changes that will occur during the repayment period. Those are signs of fraud. Bad credit does not mean that a borrower is open game for being cheated or treated badly. Long term affordable bad credit loans should not become a long term problem.