A lot of people will make financial mistakes during their lifetime. The effects can vary depending on the severity but it is often possible to recover. Learn from the experience and do better next time to prevent a recurrence. In the meantime, however, you will have to deal with the consequences as best you can. For example, a poor credit history will make it difficult for you to get a car loan from traditional lenders. You would have to take your chance on alternative lenders who are willing to take on the risk at a cost.
Qualifications for a Bad Credit Loan
In order to qualify for the bad credit car loans NZ applicants will have to be at least 18 years of age. They must be a citizen, a permanent resident, or a holder of a work permit. They must hold a NZ learner license at the minimum. Since this is a significant sum, they must prove that they can pay back the amount with a proof of employment or income. This may be through electronic bank statements or an equivalent. The lender will also ask for proof of identification and address. Those who have undergone bankruptcy or insolvency must have been discharged for at least 12 months.
Interest Rates, Fees, and Down Payments
These bad credit car loans will entail higher than average interest rates. Think carefully if you would like to push through despite the cost. It is common to see rates between 16% and 29% whereas regular rates tend to be lower than 15%. If you feel that the difference is too much for you to handle right now, then you can delay the car purchase while you work on improving your credit in the meantime. The lending fees will be higher as well. You will also be expected to put up a higher down payment as proof of your current financial strength.
Getting Better Interest Rates
If you are keen on getting better interest rates on a bad credit car loans NZ, then take care of all your recorded loan defaults right away. Pay them in full to clear things up and demonstrate your ability to stay true to your commitments. If the lender sees that you are taking concrete steps towards improving your credit, then you are more likely to get favorable assessments. They are willing to put more weight on your record for the last few years than what happened before that.