Archive for January 28th, 2009
Car Finance Approval Process
Posted on January 28, 2009, under About Me.
Obtaining a car finance approval will require some involvement of the client.
A car finance broker will do the majority of the work necessary, and will call upon the client at times to complete a task or two.
Obtaining a car finance approval for most people is quite simple, however it can take a bit of time and effort if the applicant is of high risk.
For a low risk (clean credit) application, all that a car finance provider will request is a completed application form, payslips if PAYG or Tax return if self employed, driver’s license and proof of residence.
For a high risk (bad credit) application, the car finance provider will want to delve deeper into their profile in order to assess the risk it will be buying. To assess the risk properly the lender will generally request more information and ask a lot more questions about you today and you in the past. To begin with they will request a completed application form, payslips if PAYG or Tax return if self employed, drivers license, proof of residence, 3 months worth of bank statements, mortgage statements if they are a property owner or rental ledger if renting. A credit card or a personal loan may also be requested. This information will be requested upfront and further questions might be asked. The reason for the extent of information is that the lender needs to know, understand and feel comfortable with the client in order to provide them with a high-risk car finance facility.
At Quantum, we endeavour to make the car finance approval process as quick and as smooth as possible. We strive towards same day approvals on clean credit applications and approximately 48 hours for bad credit applications. If you follow our directions, you should not need spend more than 10 minutes organising your approval.
Protecting and Improving your Credit File
A credit file is an extremely important part of your life if you have intentions of progressing financially. A lender will request a credit file check to be done on every client that it assesses for finance. For this reason alone, it is imperative that you protect and improve your credit file.
A credit file is a file that presents information on an applicant’s credit history. A credit file is used by financiers when assessing an application. More information about a credit file can be found at FAQ.
In this article, we are going to discuss protecting and improving your credit file.
Protecting:
A credit file should be protected because it plays a massive role in the world of credit. If you have intentions to establish yourself personally or commercially with property, cars, businesses and/or credit, then it is very important to protect your credit file as it plays a big part in borrowing money. Without the availability of loans it makes it hard to progress and expand in life.
What you can do to protect your credit file:
Credit alert – Veda advantage (Credit reporting agency) can attach an alert feature to your credit file. The alert feature will notify you by e-mail, SMS and phone that somebody has accessed your credit file. This is a good feature that combats you against identity fraud. There have been many cases in the past where an ex-husband will use his ex-wife’s details to take out finance in her name and then never pay the loan back. Unfortunately the wife will face the consequences of an unpaid loan and her credit file will be damaged from it. Credit alert will alert you as soon as an enquiry is made and that will allow you to stop the transaction from taking place.
If you lose a credit card, drivers license, bank account details on anything of the sort, cancel immediately.
Be very cautious as to who you allow close to your personal information. It might sound crazy however there have been situations where best friends have stolen identification and personal information to take out finance in their friends name.
Be wary as to who you become a guarantor for – make sure if you are going to do it, that it is a close relative or somebody that you trust with your life.
What you can do to improve your credit file:
Improving your credit file is not hard to do at all. Improving your credit file basically comes down to keeping up with your repayments, paying back your loans on time and adhering to all credit commitments that you have agreed upon. At some stage during the life of a loan you might come across tough times that may see you not being able to pay on time etc, if this ever becomes the case we strongly urge you to speak with your lender, which, in most cases, will end up with a rearrangement of your payments to make them more affordable. What you don’t want to do is ignore the lender and stop paying, because that’s when your credit file will begin to become damaged.
If you have past that point, and now have defaults listed on your credit file, it is not all doom and gloom, however, there is some work to be done before a lender will look at a finance application for you. The amount of work needed depends on the severity of your outstanding debts, however there is really only one solution. To improve your credit file, the only solution is to pay back the debts owed through a mutually agreed arrangement with the creditor. If the debts outstanding are too large for an arrangement to be sustainable, then maybe look at some bankruptcy options.
Lenders will look at a finance application case by case when it comes to the applicant having bad credit. In saying this, it is hard to tell someone exactly what their credit file needs to look like before a financier will approve. All that can be said is – start paying your debts off, that is the first step, and then we can work from there.
At Quantum, we have a bad credit car loan division that can provide you with more information about obtaining a bad credit car loan if you have bad credit.
Arranging Car Finance – Whats involved?
Our aim in this guide is to give you a better understanding of the car finance process and what is required to arrange car finance.
In this guide we will discuss:
1. How to enquire
2. Obtain quotes and compare
3. Submit an application form
4. Finding a car
5. Settlement
1. How to enquire
The easiest way to submit a car finance enquiry is through an online car finance broker. Submitting enquiries online allows you to make contact with several companies without consuming too much of your time. Generally, an online lender will have a user-friendly car finance enquiry form that will ask 5-10 general questions about yourself. Once you have put your enquiry through, a car finance broker will call to discuss your options and generally they will be able to provide you with an answer and a quote on the spot. When discussing a quote make sure to ask questions about ongoing fees, establishment fees and early exit fees, as these fees on top of repayments are very important to compare.
2. Obtain quotes and compare
Once you have had a brief discussion with the car finance consultant and have established what your repayment will be and any other fees involved with the product, it’s now time to compare. When comparing car finance products, you must look at interest rates, fees & charges, payout penalties, retained interest, comparison rates, monthly repayments and good service from a trusted broker that gives you good advice.
3. Submit an application form
Once you have completed all your due diligence and have settled on a quote and, thus are ready to proceed, it’s now time to submit the application. Online processes of submission vary. Submission usually occurs through an online application form on the company’s website, over the phone or a hard copy is sent via e-mail, which then gets returned either by e-mail, fax or post. The process will be explained to you by your car finance consultant when it comes time for you to submit.
4. Finding a car
After submission of your application form, your car finance is approved. It is now time to go and find a car if you haven’t already. If you have, then fantastic, all that we will need is the contract of sale, tax invoice and dealer deposit slip from the car dealership (this will generally be organised by the car finance broker if you provide them with the car dealer’s contact details). If you haven’t found a car, well then now the fun begins!
Finding a car should be dealt with in the same manner as organising car finance:
1. Enquire
2. Compare
3. Purchase
Put your feelers out there. Ring as many car dealerships as possible, and see if they have the vehicle you want, and at what price. Search on the internet as well as this can save you lots of time and it provides you with all the information required to compare vehicles.
5. Settlement
After finding a car, it’s now time to take care of all final documentation for settlement. What a car finance broker will request to finalise the facility is:
1. Contract of sale from car dealer
2. Tax Invoice from car dealer
3. Supporting documentation outstanding (eg payslip, tax return, drivers licence)
4. Insurance policy (Certificate of currency)
5. Loan Documents signed
Once these documents have been returned to your car finance broker, they will settle the car finance within 24 hours, enabling you to then start driving in your new car.
