6 June 2016
How to Overcome Bad Credit Hurdles When Applying for Car Loans in Melbourne
Most financiers will not have a problem approving a car loan for borrowers who have good credit records and their current status allows them to repay the loans without any challenges. The problem comes when you have bad credit and you have to convince the lender that you are still capable of making good the repayments once the car loan financing has been approved. The following tips will make this process a little bit easier with high chances of being approved.
Get in House Finance
When choosing this type of finance to buy a car in Melbourne make sure the company has the required credit licenses so that you as the customer have protection governed by ACCC. In house finance companies such as Rent 2 Own Cars are accredited with the appropriate credit licenses and have a excellent track record in customer satisfaction and they add a personal touch and a human face to the loan process.
Be Transparent and Honest in Your Application
Honesty and integrity are virtues that can go a long way into ensuring your application gets a nod from the financiers. Most lenders will go through your credit history so as to establish the nature of risk you bring to the company and the likelihood of defaults when approved. If you hide important details or bend the facts to favor your situation, the financier may pick these inconsistencies and use them against you which could mean an outright decline of your application. To avoid this, give the financiers the paperwork they ask for and make everything clear from the outset so that you can win their trust.
Argue Your Repayment Case with Sufficient Documentation
Before advancing a car loan, all lenders in Melbourne must go through the process of confirming your repayment ability. In the income and expenditure profile you present, they go through the figures so as to ensure the minimum for personal and family expenses are provided for. In order to jump past this hurdle, you should present an income-expense model that justifies the size of the car loan. Some lenders may accept centre-link payments such as disability payments, permanent foster parenting payments and family tax benefits as income sources.
Make a Reasonable Case of the Vehicle You are Buying
Since you are a credit risk, the impression the lender has is that you are slowly getting back your financial muscle. This means the car financing arrangement you choose should be moderate, or at least reasonable in line with your circumstances. For instance, having no savings and applying for $20,000 car loan will show lack of seriousness and this may lead to an automatic decline.
Avoid Multiple Applications
It is important to shop around so as to compare the rates and quotes before making your application. However, you should not go ahead and make multiple car loan applications because this is recorded on your credit score report. In the event a lender declines your application, the impact this can have on your credit scoring is damaging.