Myths around the no credit check car loan
If you want to finance or refinance a car loan, bad credit can feel like a real hurdle.
You may have heard of no credit check car loans and have been told there are lenders who won’t check your credit before lending you all the cash you need for a new set of wheels.
The truth is that lenders like this are highly uncommon in Australia. Australian regulations require lenders to lend responsibly, so credit checks are part of good business practice for Aussie lenders. In fact, claims that lenders have no credit checks may be a red flag for dodgy or non-compliant lenders that may be best avoided.
How do you apply to refinance a car loan with bad credit?
If you are looking to apply to refinance a car loan but have bad credit, it may not be all bad news. A responsible lender will check the state of your credit and may still have an option for you, even if your credit history is not in the best shape.
While the big banks may not offer bad credit car refinancing, there are some lenders that focus on offering loans with bad credit. It may seem counterintuitive, but a lender who already knows where you stand with respect to your credit history, may be more reliable and may not come with some of the potential drawbacks of lenders who offer “no credit check car loans”.
Responsible lenders may be able to help you avoid getting in over your head and can work with you to tailor a loan that suits your needs. They may also be far more likely to be an ethical and reliable lender that puts the needs of their customers first.
Now that you know, your credit history will most likely be checked by pretty much every lender in Australia, you can stop worrying about hiding your bad credit history and focus on finding a lender that will help you apply for a loan despite your current credit rating.
Remember, you will also need to prove your income stream, as well as your identity. Start gathering your bank statements and ID to share with your lender before you begin the process of applying for a loan.
What to look for when applying for refinancing a car loan with bad credit?
When you have a bad credit history and you’re shopping for a loan to finance, or planning to refinance your car loan, there are a few things you may like to keep in mind.
Firstly, one of the best ways to avoid paying more than necessary may be to find a loan that is more flexible and lets you payout your loan early. A loan that is flexible may have the option to payout your loan in full at any time without any excess fees. The sooner you payout your loan in full, the less interest you’ll likely pay so it can be a hugely beneficial option to have.
Some lenders may also be able to work out a flexible repayment plan for you and will understand that people have different pay schedules, so weekly, fortnightly, or monthly options suit different people. Make sure to talk with your lender at length about their repayment options and other terms and conditions, and which option will best suit you.
Why apply for a loan with bad credit?
Apart from the obvious need for cash to cover whatever costs are troubling you, there can actually be a good reason to take out a loan with bad credit. Repaying your new loan reliably and faithfully in line with the terms of your loan agreement may help to get your bad credit history back on track. Showing that you can consistently pay off your loan with bad credit, may improve future lenders’ faith in you. This may come in handy when the time comes to apply for a home loan or another loan down the track.
Who to contact for help when looking to apply to refinance a car loan with bad credit?
For personalised customer service and flexible loan options, head to Finance One. Although we do not provide a no credit check car loan, we can work with you to help find the right loan option for you, even if you have a bad credit history.
Call our friendly team at Finance One today to discuss your options.
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 circumstances. We do not accept responsibility for any loss arising from the use of, or reliance on, the information.