If you think that you cannot get a car loan due to having a bad credit score, think again. Nowadays, there are plenty of lenders who will offer an auto loan to individuals without a good credit score. However, the fees and interest rates are generally higher for such loans because the lender will be taking on more risk. In this blog, we will discuss how you can apply for bad credit car loans in Melbourne:
How to get started?
Before you start looking for suitable lenders to get a car loan from, know that your bad credit score will make it challenging to get one. But there are things that you can do to increase your chances of qualifying.
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Go through your credit score & report
It can be an excellent move on your part to go through your credit score prior to applying for bad credit car loans in Melbourne. Doing so will help you gain a sound idea of what kind of loan offers you can expect. Look for errors that can be fixed, like accounts displaying overdue payments that you actually paid off on time, low-balance accounts that can be paid off, and delinquent accounts that can be brought current.
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Show you can make timely loan repayments
Whether you’re looking for potential lenders on your own or through a mortgage broker in Melbourne, be prepared to respond to documentation requests for your income sources, credit utilisation, payment history, payment-to-income ratio and debt-to-income ratio.
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Decrease your loan amount
During the approval process for bad credit car loans, lenders factor in their potential risk if your vehicle gets totalled or you don’t make timely repayments. To improve the chances of loan approval, you can either consider making a down payment or trading in an existing vehicle.
Therefore, make sure to keep the above things in mind when planning to apply for a bad credit car loan.
