Bad Credit Car Loan Interest Rates
As the range of lenders are limited when applying for a bad credit loan, depending on the severity of your credit rating would determine what kind of interest rate you could achieve.
If you are still able to be approved by a prime lender, your interest rates would be similar to what is available in the market for normal car loans. To be approved by a prime lender whilst you have adverse credit history, a reasonable explanation as to why you obtained the adverse credit history would need to be given and satisfied by the lender.
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- We take time to find out why you have bad credit
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Top 5 benefits
of a bad credit car loan
- Fast approvals (usually within 24 hours)
- Low rates and flexible terms
- Range of lenders & products
- Fixed repayments
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The lender still would be assessing your application as per normal and it would also help if you had previous checkable similar credit with good loan conduct, as the lender can then have the comfort knowing that you have been able to satisfy a similar loan obligation in the past without default.
If you fell outside that bracket, but were still able to get approved by one of the sub-prime lenders, they would determine your interest rate by profiling your overall application, based on your credit file and your personal circumstances.
Sub Prime Interest Rates
Sub-prime interest rates can go as high as 30% p.a. and may apply to a client that has recently come out of some form of bankruptcy or Part IX Debt Agreement and it is the first borrow they have had since the discharge of bankruptcy. A whole other range of factors would also be taken into consideration, such as employment and residential status and asset position with savings and other assets.
Although a lot of clients get turned off straight away when they hear what kind of interest rates they may get as a sub-prime client, unfortunately you have to start from somewhere again and there aren’t too many options and this is a way to move forward to improve your credit worthiness.
Once you have been given this other chance and you are able to conduct your loan history perfectly, the next loan you would be able to achieve would be much better as you have proven yourself and most lenders don’t want to be the first lender that takes on the risk to see if you could prove yourself again, but once they can see that you have redeemed yourself, then a wider range of options are open to you, allowing you to get competitive interest rates again.
CarLoans.com.au can provide you a free car loan assessment, this assessment will determine what loan product suits your needs best as well as providing you with the interest repayments - click here to get a free assessment.