Excessive mortgages, loans and low income— are you facing a bad credit history? Increased cost of living has affected even a portion of the financially stable population. You may not be the only one having a credit score of below 540 or even 500. Although credits bring with them certain financial obligations, inability to get loans on the basis of bad credit history or low credit score is yet a problem. The credit score can fall because of many reasons including low monthly income, being defaulted, bankruptcies, tax issues, etc. As banks and other financial institutes try to mitigate risk to the maximum, they usually do not offer vehicle loan to applicants whose credit score is below 540.
What can rest of the people do? Wait till they improve their credit score? Of course not. Many dealers are ready to extend loans to such people as well. These are the risk takers who entertain poor credit scores as well. The term used for such loans is Bad Credit Auto Loan and certain dealers specialize in it. Almost 90% of the cases received by such dealers qualify to get an auto loan. These dealers have their own criteria to assess one’s ability to pay back and offer loans on their terms and conditions.
As already said, these dealers too have criteria to review an application and offer an amount accordingly, below is their checklist;
- The first and foremost criterion is based on your monthly income. In case you are a freelancer or a businessman, you need to give proof of a fixed monthly income so that the dealer is sure that you earn sufficient to pay back the loan.
- Next comes your legal status in the country you are residing. No dealer would extend you a loan facility if you are residing in a country illegally. Proper proves of your residency need to be provided.
- You should be legally eligible to sign in for a car insurance policy.
- A valid phone number will be required
- A personal visit to your residence will be done by the dealer. They need to be sure that the address you have provided in your application is not fake and the place is occupied by yourself. In some extreme cases, they may even seek feedback from the neighbors.
- Like any other loan facility, age limits are applicable while securing Bad Credit Loan as well, you cannot apply for the loan if you are below or even above a certain age.
Bad credit auto loan is a good option if your credit score is low and you are unable to secure bank credit. You can easily get a vehicle that you need and even improve your credit score for the future. The amount of loan received under Bad Credit Loan helps improving one’s credit rating as well.
So if you have a bad credit score and still wishing to treat yourself with a new vehicle, don’t lose hope. Contact a lender who deals with such cases. Complete all the documentation and try your luck.
Simon Hopes is a business consultant and a freelance blogger, he recently bought a new car with the help of fincar car financing company which offers great deals for financing any type of vehicle.