Quality cars are expensive, whether you want to buy a new model or a preowned vehicle, the chances are you will require a car loan to cover most, if not all the purchase price.
When you’re considering applying for one of the car loans in Brisbane, you can improve your chances of being successful by considering the following tips:
Check your credit report
One of the first things any lender will do is check your credit rating and read your credit report to help them access your application. So, it’s important that you check your credit report before you apply. This is so you can be sure about all the details on it.
If you do not disclose any items that could affect you credit score to your loan provider your loan will almost certainly be declined straight away. Lenders do not like surprises especially negative ones on your credit report.
Things that can negatively affect your credit score are:
- Unpaid loans
- Late payments or being behind in your payments
- Late credit card payments or failing to repay a credit card account
- Being behind in your rent
- The total number of credit applications you have made
- Any defaults, court judgments or bankruptcies you have been involved with
How to improve your credit score to get good car loans in Brisbane
Lenders can now discover positive financial behaviors on your credit report such as being on time with payments.
Most people do not understand that a credit report is an evolving entity and not fixed. New entries are added as appropriate and old entry’s drop off after five to six years.
There are three main credit reporting agencies operating in Queensland, Illion, Experian and Equifax, they all have slightly different operating and rating procedures, but generally they have a points system from 000 to 1,000 or 1 200.
Over 800 is considered excellent
700 to 799 very good
625 to 699 good
550 to 624 fair
Below 500 below average
Just by missing one credit card payment you can face a 22% drop in your score, if you miss two payments it could go to 26% and for more than that within three months you might face a 42% drop.
These things will help to improve credit scores:
- Pay off your credit payments each month, the best way is to have an auto payment from your bank account directly to your credit card
- Pay your rent on time, auto payment is a good idea
- Make a proper workable budget and stick to it
- Try and limit any credit or loan applications
- Reduce your credit card limit or better yet just use a debit card
- Ensure all the information on your credit report is correct by checking it before you apply for a loan
- Down pay all debts
Improve your chances of getting a loan by:
Your lender will look at your total income and your total outgoings. Most lenders will not look favorably at an application if your debt level is over 35% or your income.
- Down pay all your debts as much as possible before making a loan application
- Increase the deposit you put down
Most lenders will look favorable if you have a reasonable deposit as this shows that you are capable of saving money.
Usually, the car papers are retained by the lender as a security encase you default on payments. By paying a reasonable deposit it reduces the amount you are borrowing and effectively increases their security
Find a Guarantor
Getting car loans in Brisbane is all about convincing the lender you’re a good credit risk. You will become much less of a risk if a friend or family member will act as your guarantor and agree to repay the loan if you are not able to
Don’t overextend yourself
Many people get into trouble because they are overextended financially. It’s a good practice to put an amount away each payday for an emergency fund that you only touch in emergencies. Even ten or twenty dollars a week will very quickly build up and give you breathing space if necessary. It will also impress lenders; you should build up an emergency fund equal to 6 months wages
Choose the right loan
There are lots of different loans available so do your homework and understand how they all work
Choose the right Lender
Not all lenders are the same and you need to have a good look around before settling on one lender to approach. Often a finance broker in Brisbane is a good bet as they have access to many different lenders and can often get you a better rate with better conditions than you can from the same lender
Always read all the small print
Never sign an agreement without reading and understanding the fine print. If you don’t understand anything have it explained to you or talk with a lawyer so you don’t get nasty surprises.
You should check all the eligibility criteria before you make a loan application because if you get turned down for a loan this will appear on your credit report and could affect your chances of having a loan approved with another lender.
More than 40% of new advance applications applied for are right now being denied by moneylenders in Queensland. This is basically in light of the fact that the applications don’t meet the new prerequisites of the moneylenders. At the point when you utilize an accomplished Brisbane money intermediary for your monetary requirements, they know and comprehend the various issues every bank has. They can coordinate your advance to the correct moneylender and get the absolute best arrangement for you. Before your credit application is shipped off any moneylender for thought, they investigate it with a similar exhaustiveness the banks use to guarantee everything about be adequate to the forthcoming loan specialist.