Compare bad credit car loans without affecting your credit score
Bad credit car finance is a type of loan available to those who have a poor credit history and have been unable to borrow elsewhere. Car finance covers three different types of finance products, these are Hire purchase (HP), Personal contract purchase (PCP) and personal loans.
Being able to space out payments over a period of time is a great way to fund your next car if you want to avoid paying for a car in one lump sum. Just like any type of loan, interest rates will apply so make sure to compare providers to find the right deal for you.
How to get car finance if you have bad credit?
If you have a poor credit rating, or simply no credit at all, it can be difficult to get a car finance agreement approved. However, you do have some options. Some specialist lenders offer finance to people with bad credit.
You can compare a range of car finance deals and providers aimed at people with bad credit at Confused.com. We’ll show you your likelihood of acceptance and how much you can expect to pay, without affecting your credit score.
Get your credit report
Okay, so you may have a вЂњbadвЂќ credit score. But what does вЂњbadвЂќ actually look like? To get a decent view of your credit history, use a credit check service. This should tell you about any active credit, missed payments and people who are financially linked to you.
This is a good place to start. Make sure all of your details are correct and up-to-date. Not only does this help when lenders do credit checks, but itвЂ™ll also reduce the risk of fraud.
Compare quotes to see your exact monthly payments without affecting your credit score
How your credit rating impacts your chances at getting a car on finance
In a nutshell, your credit rating is a score that reflects how good of a borrower you are in the eyes of a lender. Lenders never see this score вЂ“ all they can access is your credit history. This will give them an indication of how good you are at managing your money.
People with a poor credit history may find that lenders offer them higher interest rates or poorer lending options. Some may refuse to lend to you altogether. Fortunately, there are ways you can improve this score over time, increasing your chances of getting car finance. While it can be time-consuming, this has the best long-term benefit.
Other ways to improve your credit rating
Cut ties with those who have bad credit
You may have an old joint credit account with someone who has since fallen into bad credit. In cases like this itвЂ™s possible that the black mark against their name is dragging you down. If you want to sever ties with these people financially, youвЂ™ll need to issue a notice of disassociation. After some checks, credit reference agencies should be able to remove this person from your file.
Register on the electoral roll
When lenders do credit checks, theyвЂ™ll check your name and address. Being on the electoral roll makes this process much easier for them, and also helps to reduce the risk of fraud.
Pay debts off in a timely fashion
If youвЂ™re trying to borrow money, having an already-growing debt isnвЂ™t going to do you any favours. Keeping up with your repayments is a good sign to lenders that you can borrow responsibly. This will вЂ“ over time вЂ“ help to improve your credit score.
Increase your deposit
With finance deals like hire purchase or personal contract purchase, youвЂ™re usually asked to put down a deposit. Normally this can be around 10%, but itвЂ™ll vary depending on what deal youвЂ™re after. Putting a little more money down at this stage could help the lenderвЂ™s confidence in your ability to make repayments. This in turn may result in a better interest rate for you.
Have you considered a guarantor loan?
While a number of companies specialise in loans for people with bad credit, there are a few drawbacks to this. The problem with many of these is that interest rates can be comparatively high. One alternative is a guarantor loan, where you get someone who trusts you to act as your guarantor. If you canвЂ™t make the repayments for whatever reason, the debt passes to them.
This method poses less of a risk to lenders and so tends to offer better interest rates than short-term loan companies. This isnвЂ™t something to go into lightly, as being a guarantor is a hefty responsibility. If the guarantor is unable to shoulder the debt, both you and your guarantor could face legal action. If youвЂ™re in doubt, speak to a financial advisor.
Bad Credit Car Finance
How does car finance work with bad credit?
Bad Credit Car Finance is designed for customers with a poor credit history to get finance when purchasing their next car.
Hire Purchase could be a suitable form of car finance for people who are struggling to get other forms of credit such as personal loans, people with bad credit, as well as people who do not want to pay cash for a vehicle.
It is a convenient way to pay for a vehicle based on budget and credit profile so you can get affordable monthly payments. Please use our car finance calculator to quickly view the monthly repayments for the amount you wish to borrow.
Choice of vehicle is an important part of the car finance application if you have bad credit. I would suggest you think about the costs associated with your choice of car such as fuel, insurance, tax, MOT, servicing and maintenance costs, as these will all have an influence on the affordability of the vehicle.
49.6% APR Representative вЂ“ Subject to status and affordability
How does Bad Credit Car Finance work?
We use a Payment Reminder System also known as вЂњBlack Box Car FinanceвЂќ which allows us to provide loans to those who other lenders may have rejected.
If you do have bad credit you may have been looking for instant decision car finance with no credit check we could help you as we are specialists in bad credit car finance.
After you have made an application and once passing initial checks, applications we receive are reviewed by the employees themselves and not just a computer program. This approach allows us to consider any extenuating circumstances such as a poor credit history, self-employment or income from benefits.
We could provide you with the opportunity to re-establish your credit rating and get you back on track.
We have made our Car Finance process as easy as possible for you:
- 1: Apply for Car Finance with us.
- 2: Our Underwriting department will review your application.
- 3: We will help you find your ideal car from an approved dealership.
- 4: E-Sign the paperwork online and drive away!
What affects being approved for car finance with poor credit?
We are happy to consider providing car finance to people who have missed payments or have a bad credit history. However, if you have fallen behind on repayments on other credit agreements it would be in your interest to do everything you can to get the repayments up to date quickly in order to improve your chances of being accepted for no guarantor car finance with bad credit.
Do you currently have an IVA (Individual Voluntary Arrangement)? If so, we will need written confirmation from your Insolvency Practitioner that they are happy for you to borrow again. If you have had an IVA in the past which has been settled, then you are welcome to apply for our car finance.
If you are currently in bankruptcy, unfortunately, we are unable to help at the present time. Our car finance blog, features articles on how to manage debt, online payday wbk helpful tips to improve your credit rating and general information about the bad credit used car buying process, so keep an eye out for these articles, which may be of help to your current financial situation. If your bankruptcy has been discharged, then we will be happy to consider you when you apply for car finance.
If you have an outstanding CCJ, that does not mean it is the end of the road when it comes to applying for bad credit car finance as you can still apply for car finance with us and we can review the application.