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Help for Bad Credit Loans

  3 Key Factors That Can Speed Up Approval for a Bad Credit Car Loan

Your low credit score may not allow you to get a low-interest loan but you can still get approved for a bad credit car loan. When you apply for a car loan with subprime credit, there are some key factors that lenders and dealers consider. To help you get your loan application approved quickly, here are the most vital factors to bear in mind.

Credit History

The amount of risk that lenders are willing to take is influenced not only by your credit score but also by your credit history. Your credit score depicts your bill payment history and debt-to-income ratio. But lenders who provide financing to people with low credit scores will also examine your financial history carefully. 

They will look at the age of your bank accounts, the number of loans you have taken in the past and any judgments that were issued against you. So it is essential for you to use any of the Australian credit reporting agencies to obtain a credit report with a credit score. Then take time to look through your report so you can provide answers to any questions your lender may ask during the evaluation process.

Income and Employment History

No matter how compassionate bad credit lenders are, they need to be sure that you have the capacity and stability to pay back your loan. So your lender will take a close look at your monthly income, the amount you make, and the number of years you have been working with your current employer. Lenders prefer to approve applications for people who have been in the same organisation for at least two years.

However, if you have moved to a higher paying job with a new employer, you will not be penalised. On the other hand, job hopping with frequent changes in employment, or gaps that show you were out of work for several months could make it more difficult to get approved.

Bear in mind that most car loans last for three to five years. So your lender must be able to predict what your income will be in the next few years. That is why your expected income will influence the value of the loan that your lender will approve. Some lenders prefer to approve loans that will not require more than 10 to 15 percent of your monthly income. If you will like to get approved for a bigger loan, you may need to put down a substantial down payment.

Your Initial Deposit

Most bad credit car loan applications will require an initial deposit before approval. Your down payment may be made in cash, through a trade in of your old car, or both. If you are not prepared to make a down payment of at least 15 to 20 percent of the loan you want to borrow, your application may be declined. A down payment ensures that you have equity in your new car and it reduces the amount of interest you pay. In some cases, it may even reduce the term of the loan.


The factors highlighted here will help your lender to know about your past and to predict how well you will perform in terms of loan repayment. If you can help your lender by ensuring that you have a stable source of income and a substantial down payment, your loan will receive quick approval.

Contact Freedom Cars today. We’re the specialists you call when you need low income car loans, Centrelink car loans or unemployed car loans. Forget about expensive, high interest loans – our system is designed to work for you.