It’s hard enough to try and seek approval for a car new if you have a bad credit history, but the last thing you want is a poor deal with a high interest rate. That will just put you further into debt. Here are five steps to making sure you’re getting the best deal.
Step 1 – Research Online
The first thing to do is get online and do some research. There are a number of services around that specialise in finance for those with a bad credit rating, such as badcreditcarloan.com.au. Not only do sites like these provide a quote, usually within one business day, you can often get approval online. Interest rates are very competitive at the moment so be sure to take note of the percentages and shop around before agreeing to any deal.
Step 2 – Visit branches
Perhaps the best way to get a straight answer is to walk into bank and credit union branches and apply for a loan in person. You’ll need to take along some bank statements and recent payslips to ensure a speedy turnaround and to increase your chances of getting approved. Once approved, take note of the interest and then venture to another bank and do the same thing to compare.
Step 3 – Telephone
Jumping on the telephone is one of the easiest ways to find out if you can get approved and what the going interest is. Depending on how much time you have you could potentially get approved interest rate quotes from a number of lenders which you can then compare. Most banks will try and corner you in to locking in a contract as soon as possible, but be firm that you just want to compare at this stage. Some banks might also take you through various button-prompted menus before you actually speak with someone.
Step 4 – Dealership finance
Most dealerships will do everything they can to try and win you over with not only a car but also with their finance. Without signing any dotted lines it’s sometimes a good idea to shop around just to see what certain dealers can offer you. Dealer interest rates are usually very high though, but it’s good to compare.
Step 5 – Stick to your price range
Lastly, lenders that approve you will want to lend you as much as they can. The more they lend, the more money they make from you in interest. Know your budget and stick to it. The last thing you want to do is get yourself into a debt that you can’t control, again. Take some time to figure out exactly how much you can afford to pay off, and don’t leave yourself too short no matter what the lender says – some lenders will say you can actually afford more than what you predicted.