Bad credit can be a major obstacle when it comes to getting an auto loan in New Zealand. A bad credit score can make it difficult to find a lender willing to provide you with a loan, and even if you do manage to find one, the terms of the loan may not be to your liking. However, all is not lost if you have bad credit and need to get an auto loan. There are a number of steps you can take to increase your chances of getting a loan and to ensure you get a loan with favourable terms.
1. Check Your Credit Report
The first step in getting an auto loan with bad credit is to check your credit report. You can get a free copy of your credit report from one of the three major credit reporting agencies in New Zealand – Centrix, Dun & Bradstreet, and Equifax. Check your credit report for any errors or discrepancies. If you find any, contact the credit bureau and dispute the information. This can help improve your credit score and make it easier to get an auto loan.
2. Shop Around for Lenders
Once you have checked your credit report, it’s time to start looking for lenders. Don’t just settle for the first lender you come across. Shop around and compare the interest rates, repayment terms, and other conditions of different lenders. This will help you find the best deal and ensure you get an auto loan with favourable terms.
3. Consider a Co-Signer
If you’re having trouble finding a lender willing to provide you with an auto loan, you may want to consider getting a co-signer. A co-signer is someone with good credit who agrees to be responsible for the loan if you default on it. This can be a great way to get an auto loan with bad credit, as it reduces the risk for the lender and makes it more likely that you’ll be approved for a loan.
4. Put Down a Larger Down Payment
Putting down a larger down payment can also help you get an auto loan with bad credit. This reduces the amount you need to borrow and makes it more likely that you’ll be approved for a loan. It also reduces the amount of interest you’ll have to pay over the life of the loan, which can save you money in the long run.
5. Consider a Secured Loan
Another option for getting an auto loan with bad credit is to take out a secured loan. With a secured loan, you use an asset such as a car or property as collateral for the loan. This reduces the risk for the lender and makes it more likely that you’ll be approved for a loan. It also usually comes with lower interest rates, so it can save you money in the long run.
These are just a few of the steps you can take to get an auto loan with bad credit in New Zealand. By taking the time to check your credit report, shop around for lenders, and consider a co-signer or a secured loan, you can increase your chances of getting a loan and ensure you get a loan with favourable terms.