Our brokers work hard at understanding our client’s unique circumstances and helping them overcome common home loan challenges. Whether you’re a first home buyer or an experienced investor, we’ll help you find the best home loan for your situation. Whether you’re self-employed and have trouble proving your income or you’re a contractor or casual worker, we offer solutions for all types of clients’ income sources.
If you have bad credit, you may still be able to get a car loan. However, you may have to pay a higher interest rate and be required to provide collateral. Break Free Home Loans work with specialised lenders who offer second chance car finance options to suit your needs. We regularly connect borrowers to bad credit car loans Melbourne lenders so they can find the right loan to purchase their vehicle.
What Is A Bad Credit Car Loan?
How It Works
At Break Free Expat Home Loans, we work with a wide range of bad credit car loans Melbourne lenders. That’s right even bad credit applicants can secure reliable second chance car finance. When you apply with an online car loan bad credit lender, the process and documentation requirements won’t be as strict, rigorous or long. With their more lenient lending criteria, lenders won’t decide how much you can borrow based on your credit score. They will let you demonstrate your ability to repay the loan in other ways.
Who Can Get The Loan
- You receive disability or parenting pension payments
- You’ve been refused credit elsewhere
- You’re retired and are on a pension
- You receive Centrelink benefits
- You don’t have good credit history
- You have a bad credit score in the past
Reasons Why We Choose Bad Credit Car Loans
Pros
- Much easier for private lenders to approve your loan
- Manageable weekly, fortnightly or monthly repayments
- Flexible repayment terms to suit your circumstances
- Chance to repair and rebuild your credit rating
- Bad credit lenders can be more fair and understanding if you’re having problems with your repayments
Cons
- Lower borrowing limits
- Higher interest rate which adds to the cost of the loan
- Security may be needed for larger loans
Requirements To Qualify For Second Chance Car Finance
Permanent Residence
Stable Employment
Recent Credit History
Being Discharged From Bankruptcy
Being Capable Of Making Your Repayments
Check if you can afford the repayments over the life of your loan. All lenders will charge fees and charges, so it is important to compare these before you choose a loan. Some of the fees you may be charged include application fees, early repayment fees and ongoing account-keeping fees. You need to compare the APR of different loan products to find a competitive loan that fits into your budget.
How To Get A Second Chance Car Finance In Melbourne?
Documents You’ll Need
The information you need for your loan application should be easily on hand. You must confirm your contact details, address, employment details and regular income and expenses. Government issued ID such as your driver’s licence or passport can help speed up the application. Most lenders will ask to see your bank statements from the last 3-6 months which you can find securely online in a matter of minutes. Once you’ve submitted your application, it can take as little as 24 hours or a few business days for your loan to be approved. Afterwards, you’ll receive the funds in your nominated bank account. You’ll then have to start making regular payments according to your repayment schedule.
Available Types Of Loans
Guarantor Car Loans
If you are not eligible to borrow money on your own, it’s easier to get your car loan approved by having someone act as a guarantor. However, this person will have to take responsibility for the loan if you default. This arrangement can risk the borrower’s relationship with their guarantor in the event of a nonpayment, so be sure to consider this carefully before making any decisions.
Dealer Finance
Car dealers may offer a finance option that works similarly to a bank loan. Oftentimes, the main difference lies in the requirement for a balloon payment at the end of the loan term to own the car. Dealers also carry out a credit check and other assessments before approving finance for the borrower. They may also charge a higher interest to borrowers with bad credit due to the increased risk of the loan.
Secured Loans
A secured car loan may use the car or another asset as a collateral. This means, the car or asset will be sold by the lender to repay the loan if the borrower defaults. This approach lessens the risk for lenders than an unsecured loan, which allows them to provide loans with better interest rates and repayment terms. For a similar reason, they may also be more willing to provide a car loan to a bad credit applicant when the loan is secured.
Unsecured Loans
Unsecured car loans do not require any guarantee. However, if you get approved for an unsecured loan, there is always a possibility of the lender taking legal action if they need to reclaim any losses. In this case, your credit rating will be negatively affected.
Will I Pay More If I Have Bad Credit?
5 Tips Before Taking A Bad Credit Car Loan
Check Your Credit Profile
Research Different Repayment Ways
Compare Interest Rates Of Every Lender
Calculate Your Monthly Repayments
If Possible, Trade Your Old Car
You can save money by reselling your used car for a profit. When you do a trade-in with a dealership, they’ll make note of the trade-in value (the price you get for selling the car) and offset it with your new one. You can also opt for selling your car in parts. If you sell your old car as you get a new one, you may be able to shave off some costs. Getting the money upfront for the sale of your old car allows you to use those funds as the deposit of your new car loan. This will show the lender you are a good borrower and will also reduce your regular repayments.
Disability Home Loans
Compare Bad Credit Car Loans In Melbourne
Have Any Questions? Talk To Us!
Frequently Asked Questions
Can I Get A Bad Credit Car Loan In Melbourne?
What Documents Do I Need For A Bad Credit Car Loan?
To apply for a bad credit car loan, the documents you need are:
- Your contact details and address – usually in the form of a lease to prove your residency
- Identification that is government issued – can be driver’s licence or passport
- Employment details and regular income and expenses – from your personal bank statements, letter of employment, contracts and other acceptable proof of income and employment
What Types Of Bad Credit Car Loans Are There?
You can consider between fixed loans, variable loans, secured loans and unsecured loans when comparing bad credit car loans. Choose the type of interest rate you want and whether you would like the loan to be secured or not. These offer different advantages and disadvantages.
Fixed loans allow easier repayments, while variable loans will use rates that fluctuate according to the market rates, making your repayments change over time. Variable loans often provide more features, but consider whether these features give you the value you need and if there are any fees charged for their use.
Secured loans require assets to be put up as collateral, and they will be taken by the lender if you default on the loan. As there is less risk for the lender, however, you can enjoy a lower interest rate for borrowing. Whereas with unsecured loans there is no such requirement. However, in the event you are unable to pay off your loan, the lender can take legal action against you. You can also look into using a guarantor for your loan or compare internal finance options from your local dealership.
Will I Qualify For A Second Chance Car Finance?
Lenders for second chance car finance are usually more lenient when it comes to assessing borrowers. As long as you meet the basic eligibility criteria, you can usually qualify for their loan. You need to:
- Be an Australian resident
- Prove you have stable employment
- Have documented credit history
- Currently not affiliated to bankruptcy or major debt agreements
- Be able to afford your loan
Contact our team
We love to hear from each and every one of you. Please feel free to reach out to us today!