Thursday, September 22, 2011
If you're buying a vehicle and you have a less than perfect credit history you may find that your options are more limited but there are still many ways in which you can obtain the necessary finance. Getting a good deal needn't be a problem either and the market is very much a competitive one for those with an adverse credit record.
The first and most important aspect to bear in mind is that you must be completely open and honest with any prospective lender and this will save any problems further down the line of the transaction. If your credit history isn't perfect, you must declare it at the very start of the enquiry. It must be kept in mind that any potential financier will be able to check your credit history for themselves and if they uncover information that isn't declared, the only likely outcome is a refused application.
An unsuccessful credit check can only harm your overall record so it is imperative that you are completely honest from the outset.
If you are buying a car from a dealership, chances are that you will be offered Bad Credit Car Finance while you are negotiating your purchase. Many showrooms are equipped to deal with enquiries of all kinds even for loans with bad credit.
There is an obvious advantage to this scenario from a convenience point of view. If you are offered a loan in the dealership itself, you can deal with the necessary paperwork and drive away before leaving the office but you must make sure that the offer is acceptable to you. Always check the interest rate to see how much you will be paying back over the period of the loan itself and check the terms and conditions and every detail. Maybe you'll want to pay the loan off early. Around 70% of personal loans are paid back before the end of the expiry date and even if you don't have any specific plans to do this, make sure that there are no early repayment penalties along the way.
Additionally, check whether the interest rate on your loan is fixed or variable. If it is fixed, you know exactly how much you will be paying back but if it is a variable rate, the interest percentage could rise leaving you with more to pay over the lifetime of the loan.
Some bad credit loans will ask for a guarantor who would become liable for the loan if the original borrower were to default. Usually, this is a member of the same family with a better credit history but you must make absolutely certain that they are comfortable with this before you sign the paperwork.
Above all, it pays to shop around and this applies even more when you have a bad credit history because it can be so tempting just to accept the first offer that comes along.
So, take your time and consider all your options. Contact as many lenders as you can and check any online comparison sites because with a little hard work and perseverance, anyone with bad credit can still get a vehicle loan that is perfect for their circumstances.
Helen Pritchard writes for both netcars.com, a used car classified
website and Car Finance 247 who specialize in helping people obtain car