Can I Get A Car Loan With Unpaid Defaults

It is surprising to see how many people actually have defaults noted on their credit files. The large telecommunication and utility companies sometimes jump right to placing a default on your file without even letting you know.

Unfortunately this attitude can leave good people in unfortunate positions. Preventing them from getting the finance they need or want. However, just because you have a default doesn't mean you won’t be able to get a loan, often it depends on what the default was, how large it was and if it paid or unpaid.

 

Telecommunication Or Utility Defaults

It is still possible to obtain motor financing with unpaid defaults if they are telecommunication or utility company defaults. Some lenders may request that these are resolved prior to your car loan settling and other lenders may disregard these altogether and not require them to be paid.  If you have many of these types of defaults though, more questions will be asked as to why and may make things more challenging to obtain approval.

Other Financier or Lender Defaults

It is very hard to obtain car financing if you have outstanding defaults to another financier or lender unless you have a good explanation and documents to evidence that. Most motor financiers will want these resolved prior to lending you more money for a car, but some leniency may be given if the size of the default is quite small.

Outstanding Court Judgements/Writs

If these court judgments have been finalised and ordered in the courts for you to pay, dependent on who placed the judgment on your file and for how much will be dependent on whether you could still obtain a car loan approval without finalising your judgment or writ. Some supporting documentation may be required and if you are still appealing this in the courts with good reason may also be overlooked by some lenders.

In summary, small defaults for things like telecommunications or utilities normally won’t stand in your way when applying for a car loan, though they can increase your interest rate and generally it’s best to repay them where you can. Defaults for finance on the other hand can make it really difficult to get the deal you’re after, so make sure you stay up to date with your repayments to prevent future disappointment.

- click here to get a free assessment.