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Can I get a car loan approval if I have a bad credit history?

Jul 15, 2020 | Insights

Applying for a car loan when you have a bad credit history, or no credit history, can be a daunting thought. But what if you didn’t have to worry about being knocked back? What if you could get guaranteed approval for your car loan? It would be great, right? A stress-free process offering guaranteed second chance finance — great! But, can you get a guaranteed car loan approval in Australia? The short answer is no, but there are other options. 

Is there such a thing as a guaranteed loan?

Under Australia’s National Consumer Credit Protection Act laws, credit providers aren’t allowed to provide guaranteed approvals to consumer loan applicants. Credit providers need to comply with responsible lending obligations to ensure that a loan is not unsuitable for the borrower and that the borrower can repay it without substantial hardship. But don’t feel disheartened! This is a good thing. Imagine being guaranteed finance only to realise down the track that you can’t actually afford to make your repayments.

 

Can I get a car loan if I have a bad credit history?

Absolutely! While traditional lenders such as banks and credit unions may knock you back if you have a bad credit history (or no credit history), lenders like Finance One understand that there’s more to your story than just your credit history. Taking a personalised approach, Finance One is able to work with people who might have less than perfect credit history to work out a finance solution to meet their needs.

Having a bad credit history generally means that you are more of a risk to lenders and this usually results in higher interest rates. However, using an asset — such as the car you are purchasing — as security against the loan can help to get a lower rate. Less risk to the lender generally means a cheaper rate for the borrower.


Benefits in getting a car loan even if you have a bad credit history

The biggest benefit is probably going to be that you can get your own set of wheels without having to borrow a friend’s or parent’s car to get you from A to B. But there are other benefits too:

  • A chance to rebuild your credit rating. Making your loan repayments on time means you get the opportunity to improve your credit rating. This could mean that in the future you’ll be eligible for cheaper finance because your credit report will be sparkling.
  • Fixed interest rates. Often car loans have a fixed interest rate meaning your repayments will not fluctuate. Fixed repayments make it easy for you to budget and keep track of exactly how much you will be repaying.
  • Fast approval process. While banks and traditional lenders can take a long time to consider your application, Finance One can have you approved in as little as 48 hours* of applying. It’s the fast track to getting you on the road in your new wheels.

A bad credit history doesn’t have to mean you’ve reached the end of the road, as there are options available to suit many circumstances. A Finance One vehicle loan could be the answer you’ve been looking for.

Disclaimer: The information above is of a general nature only and does not consider your personal objectives, financial situation or particular needs. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your particular circumstances. We do not accept responsibility for any loss arising from the use of, or reliance on, the information.

Article by: Estelle Fletcher

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