Car Loans For Bad Credit

A bad credit car loan is a specialist car loan for borrowers with a checkered credit history. 

Credit scores are usually calculated using a number from 0 -1000 with 1000 indicating an excellent credit history.  Most lenders consider a credit score of below 600 as an indicator of a bad credit history.

The simple answer to this is no. A bad credit history in the past doesn't prohibit you from accessing a car loan if you can afford it. 

The key is that your circumstances are now different from when you last defaulted on existing repayments.  As long as you meet the lenders eligibility criteria and have sufficient earnings to pay back the loan amount there are a number of lenders willing to give you a second chance. 

With that said, taking actions to improve your credit score is something we highly recommend. Starting with a bad credit car loan is a step in the right direction.  Paying back the loan on time can help improve your credit score and give you access to better rates and lower repayments in the future. 

A deposit is not required to obtain a bad credit car loan. However if you have saved a deposit this will work in your favor and also allow you to purchase a vehicle of higher value. 

As bad credit car loans are for borrowers with higher risk you can expect to pay higher rates.  At Ausloans we have partnered with several bad credit car loan lenders who offer rates from as low as 10% however in most cases be prepared to pay more. 

As with all car loans first you will need to provide and confirm confirm your contact details, address, employment details and a breakdown of your regular expenses. 

Additionally, due to responsible lending laws . you will be required to provide at a minimum 3 months  (90 days) of bank statements which you can upload digitally though the Ausloans online app.

Like all lending products there are both advantages and disadvantages of bad credit car loans. 

Advantages

• Increased probability of approval
• Tailored weekly, fortnightly or monthly repayment plans
• Flexible repayment terms, built around your circumstances
• opportunity to repair your credit score

Disadvantages

• High interest rates
• Caps on the total amount you can borrow
• Security and/or deposits may be required

The short answer is yes, however all lenders are different so depending upon the lender and the term of the loan you mat be subject to early exit fees. 

Refinancing any loan is always an option however before considering refinancing your bad credit car loan make sure you have been meeting both your car loan  repayments and regular bills and credit card payments without default.  When you refinance you will need to prove that your financial situation has changed and that you are now in a better position to service a loan.