Can I Be Approved For A Car Loan With Bad Credit?

If you’re wondering whether or not you can get approved for a car loan, with bad credit, look no further. In most cases, you might be able to get approved for a car loan if you have an impaired credit history by applying for a bad credit car loan, or by speaking to a private lender. If you have a bad credit history or score, there are lots of options available to help you get approved for a car loan.

Read on below to find out more.

Can I be approved for a car loan with bad credit?

Having a bad credit record or a low credit score may not mean that will not be approved for a car loan. Generally, lenders will look at a range of factors when considering whether you are a suitable candidate for a car loan. While your credit score is usually one of these factors, there are still others that a lender will take into account.

If you do have a lower credit score, you could find it difficult to gain approval from a traditional lender. A private lender who specialises in bad credit car loans may be more willing to approve you for a loan compared to a bank, or a mainstream lender.

How do lenders assess bad credit loan applications?

When you submit a loan application, a lender will generally consider a whole range of factors when deciding whether or not to approve you. Some of these factors might include:

Credit history – Most lenders will check both your credit record and credit score to understand your financial history. A lender may check for any previous loans you have defaulted on, or any missed payments you have listed.

Loan amount – When deciding whether or not to approve your application, how much you are asking to borrow may sway your lender’s decision. If you are seeking a lower loan amount, you may be more likely to be approved, even you have an impaired credit history.

Your income – In most loan applications, you will be asked to provide details of your income. This is so your lender can understand how much you can afford to repay, and how often you can afford to repay it. If you are submitting a joint application with a spouse, your lender will usually ask for the combined income of both applicants.
Overall expenses – Your lender will usually need to know the details of your other expenses, such as rent and utilities, as part of your application.

Debts – If you have debts such as other loans or credit cards, your lender will generally need to know about them.

Each lender will generally have its own criteria to follow when it comes to approving loans, which may be different from other lenders.

Types of car loans

If you have bad credit and are looking for a car loan, you may not qualify for a traditional car loan. However, there are types of car loans that are aimed at those who are having trouble being approved for funding. Some of these types of loans may include:

Specialist bad credit loans –Bad credit loans are designed for people who have struggled financially in the past. Intended to help people with bad credit, anyone who has any type of bad credit can generally apply for a bad credit loan. Those who have experienced these financial troubles can often find it difficult to be approved for a loan and may find a bad credit loan helpful.

Guarantor car loans – Applicants who might not be eligible for a car loan may have better luck being approved if they have a guarantor on their loan. The person who acts as a guarantor then becomes responsible to pay back the loan if the borrower defaults. This type of loan is less risky for the lender, as most of the risk rests with the guarantor.

Secured and unsecured loans – Generally, the most common type of car loan is a secured loan. The interest rates on secured car loans are usually fixed, which means that your repayment amounts will stay the same throughout the term of your loan. Usually, the car being purchased often becomes security for the loan. If for some reason, you fail to repay the loan, your lender can sell the secured car to recover the unpaid funds.

Where does Tiger Finance come in?

To us, you are more than your credit rating. We have helped countless Australians with both good and bad credit ratings to be funded for their dream car. We can help to get you a loan in four easy steps. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved.

How we can help

We can help you regardless of your credit score, and we can make the process simple and pain-free. If you’re ready to drive away in your new car, call us today for your free initial consultation with one of our loan specialists.