A bad credit score shouldn’t stop you from purchasing the vehicle you need. In fact, there are loans out there like bad credit car loans or second chance car finance that cater specifically for those with low credit scores and poor credit histories.
The interest rates, loan terms, loan features, and bad credit finance depend on the lender. As long as you fit the criteria set by the lender, you have a good chance of getting a car loan even with bad credit.
Finding a good bad credit car loan can be a challenge—we're here to help! Navigate the world of bad credit finance with ease using the guide below.
Where can I get bad credit car loans?
Bad credit car loans may be harder to find compared to standard car finance. Private lenders, car dealerships, and specialist lenders may all offer bad credit finance. But keep in mind, that the best place to get a car loan with bad credit depends on your specific needs.
Learn the basics of these bad credit loan providers so you can make an informed decision:
Private lenders. These lenders are safe and follow the same rules banks and other traditional sources of financing do. Private lenders may offer more options when it comes to bad credit car loans. Online lenders could also provide a quicker and more convenient application process. Some private lenders may provide lower interest rates compared to traditional lenders.
Car dealerships. A lot of car dealerships offer car loans which makes it convenient for car buyers. However, car dealership finance usually comes with higher fees and less flexibility with loan features. Always calculate potential repayments and compare fees from other lenders.
Specialist bad credit lenders. Some lenders specialise inproviding loans for those with low credit scores or poor credit backgrounds.These types of lenders may offer higher interest rates and more restrictive terms and conditions.Make sure to read the loan features carefully before you sign your loan agreement.
Car loan brokerages. If you don’t want to go through the trouble of searching for the perfect loan and lender, try using a brokerage service like Aussie Car Loans. A loan broker is there to help you get the perfect loan that aligns with your goals.
The best way to get a car loan with bad credit is by doing your research. Consider your options and figure out what is best for you. For those who want an easy and streamlined bad credit finance application, get in touch with Aussie Car Loans.
When you apply for a loan with Aussie Car Loans, all you need to do is talk to us about your car loan needs, and we’ll find you the ideal loan. Save precious time, money, and effort with Aussie Car Loans!
Shopper beware: Avoid bad credit car loan red flags
During your car loan search, you may find loans being advertised as ‘no credit check car loans’,‘guaranteed no credit car loan approval’or ‘car loans for current bankrupts’. If you look at these loans and they seem too good to be true, they probably are.
Unfortunately, there are a lot of predatory lenders out there who target those who are down on their luck and in need of a car loan.Watch out for bad credit car loans with exorbitant rates and unnecessary fees. Look at the terms carefully to see if you’re being charged unreasonable amounts. Also, avoid loans that have incredibly strict terms and offer no flexibility.
Having bad credit doesn’t mean you have to settle for bad car loans. Read the fine print of any loan contract and only speak with trusted lenders and brokerages.
Easy ways to improve your credit score for a better loan
If you’re still having difficulty finding an adequate bad credit car loan, consider improving your credit score. You don’t have to overhaul your whole finances to boost your credit score. Here are some simple tips to get you started:
Make sure your credit report is free of errors. Request your credit report from a credit reporting agency and see if there are any issues. If there are, have it corrected immediately so your credit score is an accurate representation of your financial situation.
Pay your bills on time. Making timely payments will slowly but surely build your credit back up. It may take time to see it reflected in your credit score, but continuous timely payments are great for your credit history.
Catch up on overdue debt. Pay off any late debts so you don’t have it still hanging on your credit history.
Don't take out too many lines of credit. Avoid applying for too many loans and credit cards in a short period of time. Loan applications cause lenders to make a hard inquiry on your credit lowering your score by a few points.
Apply for a bad credit car finance with Aussie Car Loans
Looking for the best bad credit car finance? Get in touch with Aussie Car Loans today and we’ll help you find your ideal loan! Don’t let bad credit stop you from buying the car you need. Apply online or call 1300 889 669 today.
What is a credit score?
Your credit score is a numerical value that sums up your credit behaviour, credit history, and other information on your credit report. Lenders use your credit score to assess your likelihood of paying back a loan in a timely manner. The higher your credit score, the more creditworthy you seem.
How do I know if I have bad credit?
You can request your credit report which contains your credit score and credit history from credit reporting agencies such as Equifax, Illion and Experian. Usually, a credit score of 550 and below is considered a ‘bad’ credit score.
How does my credit score affect loans?
Lenders use credit scores to gauge a potential borrower’s creditworthiness. If you have a high credit score, lenders will see you as less at risk of defaulting. This means you may have an easier time getting approved for a car loan with good interest rates. The opposite is true if you have a low credit score.
Can I get a car loan with bad credit?
Yes, you can still get a car loan even if you have bad credit. Talk to lenders who offer bad credit car loans and find one that meets your needs.
What is a bad credit car loan?
A bad credit car loan is a type of loan that’s designed for those with low credit scores or poor credit histories. These loans are also called second chance car finance.
How can I get a bad credit car loan?
Do your research and find lenders who offer good rates on their bad credit car loans. If you want to save time and money, get in touch with Aussie Car Loans and we can help you find the best bad credit finance.
Can I improve my credit score?
You can always improve your credit score, but it may take time. The best way to build your credit back up is by paying your bills and debts on time. Avoid applying for too many lines of credit. Also, make sure there are no errors in your credit report.
Will a bad credit car loan improve my credit?
Taking out a bad credit car loan could improve your credit as long as you make timely repayments. However, if you fail to make your repayments and default on the loan, it could spell worse for your credit score.