If you are having bad credit history, you are usually not approved of any loan, which also includes car financing. Under such circumstances, lenders refuse to deal with you as you are regarded as a risky client. This is because in the past you have handled your finances in an unwise manner and you have spoiled your chances of getting credit now for your new car or your first car.
Apart from your bad credit there are other reasons why you are not granted car finance. These essentially include income level, financial obligations, your resident status, your age, and so on. But there is no need to get disheartened as there are ways by which you can lay your hands on the much needed bad credit car finance Australia financiers have to offer you.
Here we will focus on few odd circumstances when you can be taken for a ride by the lenders. So, having a bad credit rating does not mean you will succumb to the unethical practices of the lenders. These conditions that many borrowers have faced in the past are as follows –
There have been instances when borrowers are offered interest free car loan deals. And the best part is you don’t have to undergo any credit checks. This may sound too good to be true. But check the market value of the car before you sign on the dotted line. It is quite likely that the loan cost may be packaged into the purchase price of the car and you might have to shell out more than what you assumed. This is a common tactic and you being a borrower will have to exercise caution that the cost of financing your car is not bundled into the purchase price of the car and you are offered an interest free loan.
There are several instances when you avail car finance from a third party like a broker or a car dealer or a sub broker. These individuals or middlemen often will persuade you to “adjust” your financial condition (income level) in paper so that even if your application has chances of being turned down, it is not as you have manipulated the income level. You have to be very careful while dealing with these dishonest people. They can take you for a ride.
As per norms of bad credit car finance Australia lenders, they are supposed to give you in writing specific information about the loan that you are availing or you have applied for. If any one of the following information is missing, you can be sure that there is something wrong about his dealings and that you might get hoodwinked in the loan approval process. So, verify without fail these aspects before you enter into an agreement with the lender. These aspects include the following –
- The amount that you are borrowing or intend to borrow
- The rate of interest that your car loan will attract
- The cost you have to incur as fees and charges for the loan that you are applying
- The tenure of the loan or duration for which you have to continue making the repayment
- The amount you have to repay as the loan repayment money
It is of utmost importance that you understand how your car loan will work. If you are not being able to understand the calculation of the repayment amount, you can seek assistance of the lender or an expert. In order that you are not taken for a ride, it is best to work with a lender that is a listed member of the Credit Ombudsman Service in Australia.