Getting a Car Loan With Defaults

Getting a Car Loan With Defaults

by | Dec 2, 2019 | Bad Credit Loans, Car Loans

Getting a Car Loan With Defaults

Getting a car loan with defaults/judgements
Getting finance once you have had defaults/judgements is very achievable and yes you can, but isn’t easy as most people think, why you might ask, because there are a lot of various scenarios that must be considered that can either get you approved or declined, its not as straight forward as having bad credit, applying for a loan and getting approved.
Everyone’s circumstances are different, there are various types of defaults and court judgments, some are accepted, and some are not accepted, in this article we are going to try and give you a better understanding of this and provide you with some important information on what will help/increase your chances of being more successful when applying for a car loan with a bad credit history.
When applying for a second chance car loan, there are a few things that a lender must consider when assessing an application which will make all the difference on a successful outcome or not, these are listed below.

Your check list for a successful outcome

1. Employment
You must be employed in your current job for at least 3 months, of course the longer you have been in your current job the better it is.

2. Current financial position
Your current financial position and the last 6 months, a lender is going to look at this to see that you are now and for the last 6 months in a good financial position and you are not currently and for the last 6 months going through any financial hardship, if you are then they won’t give you a loan, its common sense don’t you think.

3. Current debts
Current debts/loans you currently have must have a perfect payment history for the last 6 months only, if you are missing payments on any current commitments, then this will display that you are finding it hard to manage your current commitments and adding another loan to that list is not financially viable, and you will get declined.

4. Banking conduct/bank statements
Bank statements are a compulsory request from all second chance lenders, and they will need them for the last 3 months and in some cases the last 6 or 12 months, but in almost all cases they only require the last 3 months, the purpose of this is for a few reason listed below.
They will look to see that your pay goes into your bank account and calculate your average income over the last 3 months.
They will look to see that all liabilities have been disclosed on your application to ensure that they have all been allowed as part of their serviceability calculations and you can afford the loan you are applying for.
They will look to see that you are not over drawing your bank account on a regular basis, if you are then this will display that you are currently struggling with the financial commitments you currently have and providing you with a loan will not be viable and you will be declined.
They will also look to see that you are not dishonoring any payments with current debts you are paying off, if they see multiple dishonors here then you will also be declined, the odd exception to this maybe if you have had one or 2 dishonors with a very good reason and the payments were made up immediately then this maybe ok but will be looked at on a case by case basis only.
So, as you can see bank statements are not only compulsory, but they play a very, very important part of a lenders overall assessment when considering someone for a second chance car loan.

5. Pay slips/income
Pay slips are also required and are compulsory, a lender will always request your last 2 pay slips no more than 30 days old.
they must be proper pay slips and not hand-written pay slips, if you don’t get pay slips then they will require a letter from you employer on there letter head (proper business letter head) which will state your term of employment, gross income, net income, year to date earnings, your title and your position such as full time, casual or part time etc.
pay slips are also matched against the deposits going into your bank account for authenticity as well.
Your pay must go into your bank account, if it doesn’t and you get paid cash, then it is almost impossible for a second chance lender to consider your application for a loan, in some case they may want a recent tax return and ATO notice of assessment.
One of the most common questions a lot of people wonder about when considering to apply for a second chance car loan, is do defaults need to be paid, unpaid, on a payment arrangement, how many can I have before it’s to many, and how old do they need to be before I can apply, below we are to try to go over this, however these will be some examples and do not represent a guarantee nor does it suggest that you may me declined as they will all be looked at a case by case basis

Types Of defaults/Judgements

1. Finance defaults/Judgements

  • Pay day lender loans: these types of defaults would need to be at least 6 months old and, in some cases, they would need to either be paid or under a payment arrangement for a period longer than 6 months depending on the size of the default & how many you have.
  • Personal loans: these types of defaults would need to be at least 6 months old and, in some cases, they would need to either be paid or under a payment arrangement for a period longer than 6 months depending on the size of the default & how many you have.
    Credit cards: these types of defaults would need to be at least 6 months old and, in some cases, they would need to either be paid or under a payment arrangement for a period longer than 6 months depending on the size of the default & how many you have.
  • Mortgage: mortgage defaults are very difficult to assist with, these would have to be paid in full, however if it is a small amount for example under $10,000 and has been under a payment arrangement for a period of 6 months or more, then we may still be able to help.
  • Car loans: car loan defaults are one of the worst type of defaults you can have, in most cases these type of defaults need to be paid or at least on a payment arrangement for a period of 12 months or more, and they would need to be more than 12 months old.
  • Rental contracts of any kind: these types of defaults would need to be at least 6 months old and, in some cases, they would need to either be paid or under a payment arrangement for a period longer than 6 months depending on the size of the default & how many you have.

As you can see financial type of defaults need to be at least 6 months or more old, the older they are the better it is and the smaller the amount is the better it is as well, it is always best to check with us or apply for our free credit assessment, this will help determine what we can do for you, and if we cant help, then we can help you sort out a plan that will give you a chance down the track in getting a car loan based on your individual circumstances.

2. Utility defaults/Judgements

  • Gas bill
  • Electricity bill
  • Council rates
  • Water rates

The above utility defaults/Judgements are fine regardless if they are paid or unpaid as long as they are more than 3 months old, however this is also not a guarantee as it would depend on your overall profile and best that you apply for our free credit assessment to see what we can do for you.

3. Telecommunication defaults/Judgements

  • Mobile phone bill/plan
  • Home phone account
  • Internet bill
  • Foxtel

The above telecommunication defaults/judgements are also fine regardless if they are paid or unpaid as long as they are more than 3 months old, however this is also not a guarantee as it would depend on your overall profile and best that you apply for our free credit assessment to see what we can do for you.
How many defaults/judgements can you have?
The amount of defaults/judgements you can have is really depended on the size, type and age of the default, generally more than 5 starts to become a problem, more than 10 is definitely going to be very hard to get a loan at all, however once again it is best to apply for our free credit assessment to find out as everyone’s personal circumstance/profile is different.

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About Bad Credit Car Loans

About Bad Credit Car Loans

by | Dec 2, 2019 | Bad Credit Loans, Car Loans

About Bad Credit Car Loans

Unfortunately adverse credit such as defaults or a multitude of inquiries can make getting a bad credit car loan quite challenging at times. However, the senior finance consultants here at Auto Link Finance aspire to make that process as effortless and simplistic as possible for our customers. That aspiration combined with the vast amount of experience our friendly staff possess, Auto Link Finance can assist almost anyone achieve a bad credit car loan.

The first step to achieving a car loan with bad credit is to have an understanding of what exactly bad credit is and how this creates a barrier between you and attaining a car loan. Bad credit describes a respective person’s credit history and suggests that you, the borrower has a higher than usual credit risk using your credit score to estimate that risk. Factors that lead to a lower credit score on your credit report include but are not limited to: Defaults (especially finance defaults), Payday loan enquiries, judgements, bankruptcies, Part 9 agreements & a large amount of enquiries in a short period of time and missing several payments to current loans / ongoing commitments. The greater the amount of negative factors on your credit report, the lower your credit score will drop increasing your anticipated risk of adverse credit. Unfortunately lenders, especially the traditional big banks can decline your application solely based on you having a lower then average credit score.

However a low credit score is not the end of your chances to attain a car loan with bad credit. The experienced and efficient staff here at Auto Link Finance are specialists when it comes to bad credit finance. The consultants here analyse everything from top to bottom, beginning with a free credit assessment to take a look at your credit report to accurately identify what your credit history and correct any potential errors which could cause problems either now or later down the track. The consultants also take the time to explain all the finance & credit technical jargon so you have a clear understanding. Our consultants also delve into all of your circumstances inclusive of your employment and residential history as well as current income to ensure that we correctly assess your application correctly.
As previously stated we are specialists with over 30 years’ experience in finance, when it comes to bad credit car loans, and part of that reason is our large and diverse panel of lenders.

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Understanding Your Credit Report

Understanding Your Credit Report

by | Dec 1, 2019 | Bad Credit Loans, Loan Tips

Understanding Your Credit Report

Learn More About Your Credit Report And What It Means To You.

Understanding Your Credit Report and Credit History
School report cards contain numbers or letters summarizing and evaluating students’ performance. As they get older, these report cards may be used to help determine students’ eligibility and acceptance into colleges or other programs.
Your relationship with your Equifax credit report isn’t much different. It tells a detailed story about you, and includes information about your financial accounts, and your payment history. Those who can access this information, including third parties with “permissible purpose”, may accept or deny your applications for credit based in part on the information in your credit reports, as well as their own lending criteria. With your permission, potential employers and landlords may access your credit reports. Simply stated, your credit report is made up of:
Personal information such as your full name, address, etc.
Account information from lenders and creditors who report it to the three major credit bureaus

Bankruptcies
Debts you have failed to pay, or accounts turned over to a collection agency
Why Credit Report Inquiries Are Important
Inquiries on credit reports show which third parties have asked to check out your credit report and when their request was made.  When a lender or company makes this request, it is recorded as a “hard inquiry,” and it may impact your credit score.
Examples of “soft inquiries” would include checking your own credit or when a company checks your credit report to prescreen you for unsolicited offers such as credit cards or insurance. These do not impact your credit score.
It’s important to know that checking your credit report regularly is not a “hard” inquiry and will not impact your credit score. In fact, familiarizing yourself with the information in your credit report can help you more closely monitor your other financial accounts. Being able to recognize inaccurate or incomplete information or suspicious inquiries may also help you detect an early warning sign of potential identity theft.

Do Your Credit Homework

The more you know about your financial accounts and credit history before making a big decision like buying a house or a car, the more prepared you will be to take on the financial obligations that may happen as a result. Here are some things to consider as you take steps to proactively plan your finances:
 Check your credit reports and credit scores before getting quotes to understand what information potential lenders and creditors are evaluating. (You can get one free annual credit report from Equifax, Experian and TransUnion at www.annualcreditreport.com.)
 When shopping around for a loan, consider: if you apply for a loan with different lenders to see different interest rates they can offer you, the inquiries may impact your credit score.
How Are Credit Scores Calculated?
Many people are surprised to find out they don’t have just one credit score. Credit scores will vary for several reasons, including the company providing the score, the data on which the score is based, and the method of calculating the score.
Credit scores provided by the three major credit bureaus — Equifax, Experian and TransUnion — may also vary because not all lenders and creditors report information to all three major credit bureaus. While many do, others may report to two, one or none at all. In addition, the credit scoring models among the three major credit bureaus are different, as well as those used by other companies that provide credit scores, such as FICO or VantageScore.
The types of credit scores used by lenders and creditors may vary based on their industry. For example, if you’re buying a car, an auto lender might use a credit score that places more emphasis on your payment history when it comes to auto loans. In addition, lenders may also use a blended credit score from the three major credit bureaus.
In general, here are the factors considered in credit scoring calculations. Depending on the scoring model used, the weight each factor carries as far as impacting a credit score may vary.

  • The number of accounts you have
  • The types of accounts
  • Your used credit vs. your available credit
  • The length of your credit history
  • Your payment history

Here is a general breakdown of the factors credit scoring models consider, keeping in mind there are many different credit scoring models.

Payment history

When a lender or creditor looks at your credit report, a key question they are trying to answer is, “If I extend this person credit, will they pay it back on time?” One of the things they will take into consideration is your payment history – how you’ve repaid your credit in the past. Your payment history may include credit cards, retail department store accounts, installment loans, auto loans, student loans, finance company accounts, home equity loans and mortgage loans.
Payment history will also show a lender or creditor details on late or missed payments, bankruptcies, and collection information. Credit scoring models generally look at how late your payments were, how much was owed, and how recently and how often you missed a payment. Your credit history  will also detail how many of your credit accounts have been delinquent in relation to all of your accounts on file. So, if you have 10 credit accounts, and you’ve had a late payment on 5 of those accounts, that ratio may impact credit scores.
Your payment history also includes details on bankruptcies, foreclosures, wage attachments and any accounts that have been reported to collection agencies.
Generally speaking, credit scoring models will consider all of this information, which is why the payment history section may have a big impact in determining some credit scores.

Used credit vs. available credit

Another factor lenders and creditors are looking at is how much of your available credit – the “credit limit” – you are using. Lenders and creditors like to see that you are responsibly able to use credit and pay it off, regularly. If you have a mix of credit accounts that are “maxed out” or at their limit, that may impact credit scores.

Type of credit used

Credit score calculations may also consider the different types of credit accounts you have, including revolving debt (such as credit cards) and installment loans (such as mortgages, home equity loans, auto loans, student loans and personal loans).
Another factor is how many of each type of account you have. Lenders and creditors like to see that you’re able to manage multiple accounts of different types and credit scoring models may reflect this.
New credit

Credit score calculations may also consider how many new credit accounts you have opened recently. New accounts may impact the length of your credit history.
Length of credit history

This section of your credit history details how long different credit accounts have been active. Credit score calculations may consider both how long your oldest and most recent accounts have been open. Generally speaking, creditors like to see that you have a history of responsibly paying off your credit accounts.
Hard inquiries

“Hard inquiries” occur when lenders and creditors check your credit in response to a credit application. A large number of hard inquiries can impact your credit score. However, if you are shopping for a new auto or mortgage loan or a new utility provider, the multiple inquiries are generally counted as one inquiry for a given period of time. That period of time may vary depending on the credit scoring model, but it’s typically from 14 to 45 days.
Credit score calculations do not consider requests a creditor has made for your credit report for a preapproved credit offer, or periodic reviews of your credit report by lenders and creditors you have an existing account with. Checking your own credit also doesn’t affect credit scores. These are known as “soft inquiries.”

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Free Credit Assessment Process

Free Credit Assessment Process

by | Dec 1, 2019 | Applying For A Loan

Free Credit Assessment Process

How our free credit assessment works and what it can do for you.

Our free credit assessment is quite thorough and accurate and takes around 30 minutes to complete, this will provide you with valuable information such as can you get a loan, if you can’t get a loan, we will advise you why and what you need to do/fix to be able to get a loan later, and when to come back & re-apply.

If you can get a loan we will be able to tell you how much you can borrow, what the interest rate will be, what the loan term will be, what fees are applicable, and finally what the realistic repayments will be all based on your personal circumstances.

Our process is stepped out below.

Step 1.

  • We will collect some very basic details from you, this takes around 10 minutes and will allow us to start to get a picture about you.

Step 2.

  • We will get you to sign our privacy disclosure document, this is a digital document that is emailed to you and you can sign it on your phone, computer or tablet, takes a minute to complete and no printing is involved.
  • This will allow us to discuss finance options with you and will allow us to look at you credit report to see what your credit score is and other information that we require to provide you with an accurate assessment.

Step 3.

  • We will now ask you a few questions about yourself, your personal circumstances and current financial position.
  • We now conduct an income and liabilities test to make sure that you have enough surplus income for the loan you are applying for.
  • If required we will also ask you to provide us your bank statements for the last 3 months, this is done online through our banking section on our website, takes less than a minute and is free of charge, you bank statements will help us to make sure all your liabilities are allowed for and we also average out your income over the last 3 months to get an accurate picture of you weekly pay.

Step 4.

  • Now that we have all the accurate information about you, a lender is then selected that best suits your personal profile and we provide you with an accurate quote and disclose to you what the interest rate is, what the weekly repayments are, what the loan term is, what loan amount you can get and finally what fees apply to the loan.
  • Should you accept our quote and you want to proceed to get the loan, we then ask you to provide us with your last 2 pay slips and then we complete the full application which takes 15 minutes to complete.

Step 5.

  • This is the final process, here will prepare your application to be submitted to the lender for formal approval, we write our letter of recommendation for approval, prepare all the paper work to send them to review, employment & residential checks are done, and finally your application is submitted to the lender.
  • Formal approval usually takes around 12 business hours to come through, though sometimes it can take up to 24 business hours.

Step 6.

  • This is when your formal approval is provided, and you start shopping for a car.
  • Once you have found your car, loan contracts are drawn and provided to you to sign and settlement generally happens with in 24 to 48 hours
  • We do guide you through every step of the way, so no need to worry or stress.

Don’t let bad credit hold you back, Apply now for our free credit assessment and see if you can get a loan today.

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About Interest Rates

About Interest Rates

by | Dec 1, 2019 | Applying For A Loan, Bad Credit Loans, Car Loans, Commercial loans, Interest Rates, Loan Tips

About Interest Rates

4 MAJOR FACTS THAT INFLUENCE YOUR CAR LOAN INTEREST RATE
If you’re looking at buying a new car and getting a car loan, it pays to be prepared. We look at some of the factors that can influence what sort of interest rate you can get on a car loan.
The first thing a lender will want to see when determining your car loan interest rate is evidence of your financial status such as your current income, other loans or credit.
What is a car loan interest rate?
When applying for a car loan (or any type of loan for that matter), it’s important to look at interest rates. An interest rate is essentially a fee you’re charged for borrowing money from a lender. It is expressed as a percentage of the total loan amount per annum (or year).
There are a number factors that can influence the potential car loan interest rate you can get – such as your personal finances, credit history, deposits and not to mention the amount of shopping around that you do. Let’s have a closer look at some of these.
Financial Status
The first thing a lender will want to see when determining your car loan interest rate is evidence of your financial status. Factors like your current income, your credit score, other loans or credit you might be paying off and your spending habits also have a big influence on your potential interest rate. A way to help reduce this process is to sit down and calculate how much you can realistically afford each month.
Vehicle age
Vehicle age is another thing that lenders will take into consideration, with some lenders refusing to loan if the car is older than five years, and some older than 9 years, however there are lenders that will look at cars that are up to 25 years old, but one important thing to keep in mind is that the older the car the higher the rate will be due to the increased risk on older cars. This is because cars are one of the common purchases that lose value (depreciate) over time. If you default on a payment and the lender has to seize your car and sell it, they may not get the full amount they’re owed back from the sale, which creates a high risk, so the older the car the higher the risk and the higher the interest rate.
Credit history
Your credit score indicates to a lender how much of a ‘risk’ you are as a borrower. Many people think that by applying to multiple lenders at the same time, they can get the best interest rate possible. However, each time you apply for credit, your score can be negatively impacted, each time you apply for credit your credit score reduces – so making multiple applications could backfire and end up impacting your credit score which will impact your interest rate and also reduce your chances of getting a loan at all if your credit score is too low. Make sure you’re aware of your credit rating before applying for a loan because if your application is rejected by the lender, this could also impact your credit history.
The other items looked at from your credit report is, do you have defaults, judgments, basically any bad credit you have had will also place you in the high risk category and will have a major impact on 2 things, one is, can you get credit at all, the other is, if you can get credit then due to the high risk you fall into because of the bad credit history you have the rate would be high as well, the interest rate is then calculated on how high of a credit risk you are, the higher the risk category you fall into the higher the interest rate would be, however keep in mind that you can still get reasonable interest rates if you have had bad credit and you fall into a low credit risk category.
Applying for a car loan through a licenced broker
When applying for a car loan with a licenced broker, our credit check will never appear on your personal credit report, therefor it doesn’t impact your credit score and will never reduce your chances of getting a car loan, applying though a licenced finance broker is always a better choice when you are wanting to know if you can get a car loan, and what car loan packages/options are available to you based on your overall profile. A licenced financed broker has access to many lenders and can place you with the correct lender the first time based on your personal circumstances and credit profile.
At Auto Link Finance we provide a free credit assessment that provides this service for you, during this process we are able to tell you if you can get a car loan, what options are available to you, what the interest rate would be, what loan amount you can get, what the actual repayments would be, and finally what the fees associated to your car loan are as well, this is a very comprehensive accurate assessment conducted by our Senior finance consultants with over 30 years’ experience in bad credit car finance & good credit car finance,
Want to know what we can do for you, apply now for our free credit assessment, its free, has fast results, its very accurate and provides you with everything you need to know in order to make an informed decision before proceeding to get your car loan.

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