It is frustrating to fall in love with a car and then find out that you can’t take it home. All because you don’t qualify for financing due to bad credit. Bad credit has no specific range. It is a matter of opinion that varies from each moneylenders. One money lender may consider your credit as poor while others will put you in the range of subprime. Hence, these quick tips on how to get the best bad credit car loans make it possible.
Bad credit does not mean that you can’t ever buy a car. You can even take a new car despite your poor credit standing, as many trusted licensed moneylenders are still willing to approve bad credit car loans. Do not lose hope yet, here are some tips to get your car through a Singapore auto loan even with a poor credit score.
Moneylenders may have different ways when evaluating a credit score, however, to give you an idea, it may range like this:
To give you a better outlook, you still have a better chance of getting a loan than those having to a credit history. If you are determined to get a car, better plan on getting a good auto loan way ahead of shopping for a car. You can get a copy of your credit report from Singapore’s Credit Bureau. The credit report will contain your personal data (except your contact details), default records (unpaid debts), all credit checks made, credit repayments for the last 12 months, bankruptcy records that will stay in the record for five years, and credit accounts, outstanding balances and inquiries.
To get a copy of your credit report, simply contact Credit Bureau (Singapore) Pte Ltd and DP Credit Bureau Pte Ltd. These credit bureaus gazetted are the only bureaus allowed by the Monetary Authority of Singapore (MAS) to make copies of your credit report. Once you get your copy, evaluate if it may fall into the poor bracket.
There are certain factors that can pull down your credit score.
Now that you know what affects your credit score, try to find some mistakes in your credit history and fix them.
If you have some, your previous moneylenders are the ones who report your payments. There are times that they may fail to report your on-time payments and only report your failure to pay on schedule. If you find some mistakes, contact the credit bureau which provided the data. They will post your dispute on your record to make it clear that it is under investigation, and then they will constantly inform you about its progress. Once an amendment has been made, the credit bureau will send the revised copy of your credit report to you and to the people who made enquiries on your record for the past three months.
Take some time to shop around for bad credit auto loans, but be careful with the intervals of your auto loan inquiries. Too much inquiry will pull down your credit score further. Try applying for the loan in 14 days, this will come out to your record as a single hard inquiry.
Compare the Annual Percentage Rate (APR) of auto loans instead of looking at its low monthly payment. If you focus on the monthly payments and interest, you will not see the bigger picture that you might be paying more than you could. Do not fall into the trap of making your loan period longer just to have lower monthly interest rates, in the end, you will be paying too much interest.
Bring a companion when going to the moneylender’s office. Your companion can act unconvinced or cynical and may ask questions that you may have overlooked. Moneylenders may want to talk you into the highest possible rate they can fetch, your companion can bargain for you if you don’t have the guts.
Once your credit is back in good shape, always keep track of your credit report. Make sure your payments are well recorded to avoid errors. If you can, pay all the monthly payments in full. If you want to pay in full earlier than the loan’s time period, make sure there will be no penalty. Some licensed moneylenders in Singapore have prepayment penalties. If you decide to have multiple loans, it will be helpful to have them with only one provider. This way you can easily track your payments and outstanding dues.
Having bad credit does not mean you say goodbye to having a car. You just have to do more work, but it will pay off in the long run. Once you get a good Singapore auto loan to fit your needs and financial standing, ask how much you can spend on a car. Choose your car wisely. Instead of choosing according to style, choose according to your needs.
Car loans for people with bad credit are not impossible, take your time to look around. Who knows it may just be a few clicks away.