How To Qualify For An Affordable Car Loan On Bad Credit?
Credit rating plays a crucial role when you head for a car loan. After going through your credit score and report, the lender decides the probability of lending to you. Most profiles with bad credit find themselves in the dilemma of whether they will qualify.
You must have a sound credit score and history to get a car loan. However, one cannot postpone the dream until credit correction and improvement. Thus, car loans for bad credit emerge as a hope for these individuals.
What does a bad credit car loan imply?
Bad credit car loans are finance options for individuals looking to have their car on a low credit profile. High street lenders turn down borrowers with unattractive credit profiles. But some provide loans for bad credit
to such individuals.
A car loan, in such cases, is a hefty proposal. Some lenders may demand additional security over the loan if the borrower needs to possess a good credit score and income. It happens if the borrower does not meet the bad credit car loan criteria. These loans are generally for 36 months. You can borrow up to €15000 in a car loan.
What Parameters does Mycreditbucks look for while screening car loan applications?
Before approving the application, a lender considers certain factors. Here are these
1) Credit History
Credit history is a crucial factor in getting online loans in Ireland
. It gives a sound reflection of your income, outgoings, and repayment behavior. You may qualify if you have an optimized credit profile with recently cleared debts and no high-interest debt.
Conversely, if your credit report reveals casual repayment behavior, the lender may switch to other possibilities for loan approval. Before approaching for a car loan, check and clear maximum loans off your credit profile. It would help reduce liabilities and qualify for affordable interest rates.
It is yet another important factor that lenders tap into before approving a car loan application. Here at Mycreditbucks, we identify the disposable income, counting in the liabilities and outgoings. Income may include every source- income from scholarships, grants, or investments.
The lender may deny the loan if someone solely relies on jobless benefits without any other potential earning resource. If you arrange for a 40% deposit or collateral, you may still qualify with us.
3) Loan amount requested
The loan amount you request at the portal is a crucial determinant. You may get a car loan if:
- If you borrow a small for a pre-owned car
- If you borrow high with a hefty deposit
- If you have a good income and deposit flexibility for a new car
These measures help you qualify for car loans for bad credit
4) Your residential history
Borrowers with a stable residential history are preferable for car loans. It reveals that a stable lifestyle is less likely to change in the future.
If you do not own your own home or live on rent, you may find it challenging to get a car loan. Your electoral roll is a prime identification in this case.
PRO TIP: REGISTERING FOR AN ELECTORAL ROLL IN IRELAND COULD HELP YOU IMPROVE LOAN APPROVAL CHANCES.
Who Can Qualify for Bad Credit Car Loans?
When it comes to car loan qualification criteria, every lender differs in its perspective. However, the base for the same remains almost similar.
ELIGIBILITY CRITERIA FOR A BAD CREDIT CAR LOAN
- You must be 18 years or above while applying for the application
- You must be a permanent Ireland citizen with valid proof of the same
- Must have a stable job-part-time/full-time/ casually employed/ self-employed
- Your earnings must be no less than €25000/month
- If buying a car on loan for business purposes, you must use it 50% for the same purpose
- Your car must not be over 15 years at the time of final purchase
What Documentsmust you provide to get a car loan on bad credit?
Here is the list of documents that you must provide at the time of the loan agreement:
- Your last 2 payslips
- 70 days of bank statements
- Your driving licenses
- Information on the existing outgoings, liabilities, and any assets
Can I get car loans for used cars at the portal?
Yes, you may qualify for new and used cars on bad credit with us. If a car is less than 7 years, you can get 90% of the car’s value. Our loan approval rates stand at 95% for car loans on bad credit. Some may provide 97%. However, we prioritize reducing the risk of default for the customer and approve only the ones that meet the eligibility criteria.
How can I make the car loan on bad credit affordable?
If you are unemployed or have a low income, you may struggle to qualify for a car loan for bad credit.
You can take the below steps to ease up the loan qualification process:
1. Seek additional income sources
Individuals with low credit and income streams might not share the best hope regarding loan qualification. Check on the prospects of getting a hike or another income mode. Having a good passive source of income can help you improve your loan approval chances.
2. Clear the pending loans in the credit report
After identifying the income prospects, identify the loans you clear off the credit profile. Begin with the short-term ones, as these are generally high-interest ones. Having your name on the electoral roll boosts your credit score. It is how it helps improve loan availing possibilities.
3. Save for a bigger deposit
In bad credit, a deposit may help you bridge the gap between dreaming and getting your hands on the steering. Before applying, consider saving for a deposit. It would help you qualify for online loans in Ireland
and reduce the interest you must pay.
- Consider having a guarantor or co-signer on the loan
These are two different situations but work almost the same:
- Getting a guarantor on a car loan
A guarantor is a third person that helps the borrower qualify for the loan by providing their credentials. He is liable to pay the remaining amount if the borrower cannot. It can help you win affordable loan terms.
b) Getting a co-signer on the car loan
It is a joint agreement between the lender and two borrowers. It is generally applicable to husband and wife. In this, both are equally responsible for repayments. You can spread the cost and risk associated, thus making the loan economical.
The blog states the best ways to get car loans on bad credit. One must identify the possibilities before applying. Identify the priorities, income, aspirations, and work accordingly.