6 August 2016
Five Critical Requirements When Seeking Car Finance with Bad Credit
Having bad credit is certainly an undesirable situation to find yourself in especially when looking for credit. However, all is not lost and you have every reason to look and apply for financing because there are lenders who specialise in dealing with people with bad credit, such as Rent 2 Own Cars. When applying for car loans specifically, financial institutions will give you a number of options through which you can access credit to finance your car purchase. That being said, these lenders have some minimum requirements that you must meet as a borrower if your credit application is to go through.
Lenders require details of your monthly income so that they can determine how much they can lend to you and structure your loan repayment. They look at the gross income and any other deductions your income is subjected to. Inasmuch as lenders want to give you credit facilities, your overall welfare is also part of their concern.
For the self-employed; lenders, mostly require your income tax statements at least for the past two years and at times they may request bank statements to evidence the income reports submitted.
Current State of Employment
If you are employed and you have bad credit, lenders require as a general rule of thumb that you should have been employed with your current employer at least for a year. A stable employment history is an indication to the lender that your chances of repaying the loan they are advancing to you, is high. This means new employees with bad credit may have to wait a little bit before they can seek car financing.
Age and Citizenship
Another requirement for car finance with bad credit that lenders are likely to consider is your age as well as your citizenship status. For you to qualify for these loans, you must be at least 18 years of age and be a citizen of Australia. In the event you are below the age of 18, you will be required to have a co-signer.
Bankruptcy Filings Status
Any bankruptcy filings you may have on record will be considered by the lender before the decision to give you credit is arrived at. There are limits to how much you are allowed to borrow if you are or have been bankrupt. Ensure you provide as accurate information as possible so that the lender can have the full picture before arriving at the financing decision.
When accessing car finance with bad credit, lenders want to know how many vehicles have been repossessed from you if any. This is a requirement out of concern because lenders want to ensure their investment in form of the loan they grant you is safe. If you have had any repossession within the past 12 months, such repossession must be included in your bankruptcy filing. The repossessions here include voluntary and involuntary.
It is therefore important that you know these basic requirements so that you can be prepared beforehand when looking for bad credit financiers. It will save you the back and forth and the frustration it comes with.