Before you learn how to take a car loan with a bad credit history, it is worth familiarizing yourself with the types of the latter. The likelihood of approval of an application for receiving money in banking institutions directly depends on this.
If you have a loan with existing delays, it is almost impossible to arrange not only a car loan but also any other loan.
The answer to the question of how to apply for and receive a car loan with a bad credit history depends on the degree of neglect of the situation. There is no universal solution to the problem, so you have to check all possible options.
You need to be prepared for the fact that a financial institution may offer less favorable terms with a high-interest rate or a small loan amount. In this way, the bank tries to protect itself in the event of a lack of payments.
Consent to a voluntary insurance package helps increase the likelihood of approval. It usually also allows you to lower your car loan rate.
All available options will do:
Car loan without a down payment and according to a passport
In some situations, it also helps to provide evidence that previously, the credit history was damaged for reasons beyond the control of the borrower, for example, poor health, dismissal from work, and so on. It is also desirable to document this fact. A copy of a work book, a certificate from the accounting department about wage delays, a medical certificate will do.
Choose the right bank
This is another good way to decide how to get a car loan without a credit history or when it has been damaged. It is great if the client receives a salary at the bank he applied to to complete the contract. In this case, the financial institution already has information about the size of the client's official income, the regularity of the receipt of funds.
The second option is to contact a small bank that is just beginning to develop and is actively looking for clients. Usually, the chance of getting a positive decision in such institutions is several times higher than in large companies.
In advance, you need to find information about the activities of the new bank and reviews about it.
Use the state program
It is difficult to say for sure whether they can borrow funds with a bad credit history under a government program . But if this happens, the client will be able to count on a decrease in the interest rate, regardless of how many delinquencies he had earlier.
An important point: it is necessary to familiarize yourself with the conditions of the state program in advance, as it has its own characteristics. For example, its effect applies only to the purchase of a car of a domestic manufacturer. There are separate requirements regarding the cost of the car, its weight, and the loan term.
Improve credit history
This will take some time, but good credit will be helpful in the future. To improve it, you can take a consumer loan at a hardware store and quickly repay it without delays. The more closed bank liabilities or microfinance loans , the faster the situation will level out.
Some banks have special programs to improve your credit history. You can find out about them at the branch or by calling the hotline.
Use the services of an intermediary
Car dealers do not check the financial reputation of customers, since a request to the BCI is a paid service. But this method does not give a 100% guarantee of crediting without refusal, since the money is issued not by the car dealership, but by the bank to which the loan request was submitted.