Using a company that can approve your loan
Applying for a car loan with bad credit
Key takeaway – use an expert loan provider with proven track record and customer reviews.
Face to face decline dilemma
Key takeaway – let the loan market come to you and use an online provider.
What is involved in a loan application
Let’s review the key stages of a CarPow Loan:
- Licence Type
- Address History
- Employment Status
As a minimum you will require at least a learners licence to be eligible to apply. The type of licence you hold will also effect your ability to get an approval or the rate the lender sets for your loan.
Under 21? Expect it to be hard going as many finance companies will often only consider approval if you are over this age. Don’t be disappointed if you are asked for a co borrower or guarantor as you have little or no history and as much as we would love to change this
we have to stick to the rules.
Surprisingly this isn’t just used to find out where to send letters too and is also important to assess what is called your stability. Been at your home address for 10 years? This means a lender will have an idea where you will be next year. Had to move every 6 months? Expect
alarm bells to start ringing due to your transient pattern of behavior.
Working or on the benefit? You might be surprised to hear there are positives to both types of income but mostly a full time employment will give you the greatest chance of success for a car loan. How long you have worked at your current employer is also like your address history – the longer the better. Post COVID its no surprise that essential type work is now considered super safe and looks great when reviewing your application. Higher level professional positions carry an higher salary but that can also mean nothing if we move onto the next factor – affordability.
Previously lenders at the top level who dealt with perfect credit customers would approve with one payslip. Those days are starting to disappear and now most will ask for 3 full months bank statements for ALL accounts. Think of a calculation of income minus outgoings and you have a simplified version of what is carried out. A fixed amount is deducted for living expenses and each member of the family has a specific amount used. Rent or mortgage is obviously assessed along with current loans or finance. You need at least $1000 left over ideally for any approval including bad credit car loans.
Responsible lending and financial hardship
Click here for more information from the Commerce Commission on Responsible Lending