Tips and advice to get car finance while under debt review in South Africa.
Believe it or not, it is possible to get car financing even if you have debt related problems.
In fact, if you were to contact most vehicle loan companies they will almost always tell you to simply apply. Because car financing is often influenced by factors other than the presence of bad debt.
So even though you may not apply for any additional debt while under review, that doesn’t mean that you can’t get a new set of wheels.
Just remember that getting a new car is not the same as getting additional debt in the form of money. There are payment schemes and systems that you can use to get the automobile you need without necessarily increasing your debt.
On the other hand, you should also remember a debt review often overlaps with other financial problems.
Some car finance companies are willing to overlook debt reviews. Almost all of them will take very close look at your credit history and in particular whether you have been blacklisted.
Car Finance Companies
Also, most finance companies know that interest rates will increase over time. Thus disrupting the ability of certain borrowers to meet their car finance payments.
If lending companies are concerned about this possibility they will most likely take a more cautious approach in approving new applications.
So if you need car finance under debt review, make sure that you can present something positive on your application. Debt reviews can hold you back on most applications. Regardless of what sort of financing you’re pursuing.
Most finance companies will only hesitate to approve your application if they consider your existing debt review as a symptom of a more complex financial problem.
If you’ve had multiple debt reviews in the past. Or if your financial problems are the result of consistent financial mismanagement then you will not get the finance company’s approval.
On the other hand, if you can prove to the finance company that your existing debt review is the result of misfortune. Or that you are now in the process of solving the problems which lead to it. Then you are more likely to get your application approved.
So if you are looking for a way to get a new car, here are 5 tips to get car finance while under debt review.
Tip#1. Find A Car Financier That You Can Trust
First things first. You will need to find a financing company that can offer you the car you need despite your debt review. A reliable financier will offer you all the data you need.
- your chosen vehicle’s make and model
- list date
- body type
- transmission and drive train
They should also offer you acceptable terms and conditions and supply you with additional details about your application.
Most car financing companies will also offer special terms and packages to their prospective clients. Some company’s, for example, offer rent-to-own car programs.
You can take advantage of these types programs to get the motor you need despite the limits imposed upon you by your current debt review.
Tip#2. Try to Do Something About Your Existing Loans
Whether it’s debt consolidation or debt counseling, you will inevitably need to do something about your outstanding loans.
Anything that you can do to reduce the principle amount of your loan can work in your favor.
For example, most debt financing companies are more likely to consider your application if you can prove to them that your debt review is about to end very soon.
Tip#3. Choose Your Options Carefully
It’s worth remembering that there are certain types of debt schemes that you can get even while you are under debt review. A few examples include personal loans, payday loans, cellphone contracts and debt counseling.
These kinds of loans can range from a few hundred Rands to around R150,000. It all depends on which financier you go to.
However, the amount of money you can get access to is limited, but that doesn’t really matter if you have a good payment scheme in place, like rent-to-own.
Tip#4. Present Proof of Good Financial Standing
Car finance companies are more willing to help if you can present them with proof that you can pay them back. Although this isn’t always easy, it remains a very good option for some people.
A job, a home or even your old vehicle can greatly help you secure car financing. Even if you are still under debt review. This approach doesn’t always work. Many financiers are more willing to accept your application if you seem like you have some property on hand.
Tip#5. Choose Your Car Ahead of Time
Car financing is strongly influenced by the type of car that you are planning to buy. Although it’s possible to get a more recent car when using car financing, most makes and models that you can expect to get are often decades old.
The 2005 Honda CR-V 2.0, for example, is one such car that you can expect to get if you’re still under debt review. Toyota and Nissan cars from the early 2000’s are also more accessible for people looking car financing with bad credit. So pick your automobile ahead of time. Once you’ve made the necessary choices, you can proceed with your selection.
As you can see, it is possible to get car financing despite being under debt review.
However, you’re not actually getting a debt in the strict sense of the word. But rather you are purchasing a car under a special scheme that allows you to purchase without actually incurring direct debt.
While under debt review, you also need to remember that your options with regards to cars and payment plans are limited. So it’s best to be cautious and take things slow.
It’s worth mentioning that people who are under debt reviews take out loans all the time. They do it for emergencies as well as medical expenses. The same rule applies for financing a car.