Getting a car on finance is more popular than ever! But with so many people in the UK having a car on finance, how easy is it to get approved? What checks need to be done to get you into the car you want? Refused Car Finance are a car finance broker who help people with bad credit get approved for car finance. They explain the car finance approval process and how you can maximise your chances of getting approved for car finance!
The most common car finance checks include a credit check to distinguish your history of borrowing and an affordability check to make sure you can afford to pay your loan back. Most lenders will also require you to provide proof of identity, address and driving license.
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Credit check
You should be wary of any car finance companies who are advertising guaranteed car finance as no car finance company can guarantee car finance without taking any details or a credit assessment. Lenders take a quick look at your credit file to see if you’ve had problems in the past meeting your repayment deadlines. Before applying for car finance, you should check your own credit score and have a look for any inaccuracies or fraudulent activity. You can contact the credit referencing agency who provided your credit report if you see anything that does not look right. If you are applying for car finance with bad credit then you may be worried about passing a credit check. However, there are many affordable finance deals for people with bad credit. Alternatively, you could consider improving your credit score before you start applying for car finance.
Affordability check
Bad credit car finance specialist such a Refused Car Finance don’t think that your past credit mistakes should hold you back from getting finance. They also consider your current affordability to get you matched up with the most suitable finance lender. An affordability check is when lenders look at your incomings and outgoings to determine if you can afford to pay back your finance and which car finance deal you can afford. The general rule is the more disposable income you have, the more likely you will be able to afford to pay back your finance. Remember, it is essential that you don’t borrow more than you can afford to pay back. Struggling to repay your finance and missing payments can seriously affect your chances of getting finance in the future.
Proof of identity
To help reduce the risk of fraudulent applications for car finance, lenders will usually ask for you to provide proof of your identity. You can do this by supplying a photocopy of your driving license. Some lenders may also require you to provide your passport as a form of identification.
Proof of address
For finance lenders, traceability is key. If you fail to meet your repayment deadline, for some forms of finance the car finance lender has the right to take the car away from you so it’s important to know where to find you. You will usually need to provide 2 proofs of address which can include a utility bill and a bank statement. You can also consider registering on the UK electoral roll. Lenders use the electoral roll to verify who you say you are and your living address.
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Photocopy of driving license
You may be asked to provide a photocopy of the front and back of your driving license to prove you identify but lenders also want to know which form of driving license you have. It is much easier to get approved with a full UK driving license. A limited number of lenders do provide finance for provisional and European licenses too.
Employment status and proof of income
There are many options for finance for people with different employment statuses. You can now get finance whilst in receipt of benefits, working part time and self-employed car finance deal. You can prove your income by supplying bank statement. If you are self-employed and receive cash in hand, you should try to deposit any money into a UK bank account so you can prove your income.