Don't Let Bad Credit Stop You From Getting a Car Loan in New Zealand

New Zealand has a deep history and great affiliation with the motor industry. This love affair began with those growing up in rural New Zealand learning to drive at an early age, and continues with the tradition of summer road trips with families and friends. In New Zealand owning a car comes with a large set of advantages. A car gives you the freedom to travel longer distances comfortably with improved privacy, particularly because of the distances between cities and the fairly limited public transport options.


Although there are several car manufacturers and models which offer their own unique features, cars do not come cheap. You might be required to purchase a car for your personal travel needs in Porirua, Kapiti or Wellington, but if you do not have enough money, you would have to approach a bank for a loan. A bad credit rating would then be one of your biggest obstacles in getting a car loan approved.


A credit rating is based on different models of calculation, but the basic concept remains the same - lenders will be able to predict how reliable you are when you need to pay back the money you have borrowed. However, a bad credit rating can arise because of different reasons, none of which can prove that you should not be trusted with a car loan. Being self-employed, having little or no credit history or being a new immigrant might result in getting a bad credit rating.


Regular banks have to follow many rules and regulations which are aimed at minimising their risk while offering loans. One of the quickest ways to find out the risk they are taking when investing in you is to check your credit rating. Your credit rating can be used by your bank or lender to determine some important aspects which affect your financial activities. Insurance companies also use your credit rating to find out how much discount they can provide for an insurance policy and banks use it to help decide the rate of interest you need to be charged for a loan. Even the banking decisions such as extending credit, approving a certain credit amount, increasing or lowering your credit limit and even closing your credit account all depend upon your credit rating.


Although a bad credit rating is a major obstacle in getting a car loan, there are some alternatives you can use for car finance in Wellington. One example is if you own equity in your property, you may be able to get a low interest line of credit, which can be spent on your car. Doing it would mean that your property would be put at risk if you are unable to pay the equity.


Credit unions are organisations, which are owned by members who have something in common. They provide loans, accept deposits and provide other financial features as well as generally offering much better customer service compared to regular banks. However, you need to fulfill the eligibility criteria of a credit union if you want to borrow money from them. Depending upon the type of credit union, you would need to have certain fraternal or religious affiliations, live in a specific residential areas or be part of a specific employee group.


Peer-to-peer lending requires the use of an online platform, which allows you to borrow directly from other individuals instead of an institution. The process is streamlined and reliable and it helps you borrow money for relatively low rates of interest. Although credit rating is still a factor in peer to peer lending, some individuals might be willing to provide vehicle finance if you are in Wellington.


Taking a loan from family or friends might be easier for you, if your credit rating is not good. However, you need to treat a loan from your friends or family as serious business transaction, complete with clear documentation and legal records to avoid complications. This option should be kept as the last resort for financing a car in Wellington as you do not want to risk having a bad debt with a loved one.


If you have a bad credit rating and are in need of a car loan, it is best to approach a financial institution like Oxford Finance. They help you through the entire process of sanctioning a car loan, right from calculating an amount you can borrow, to choosing a range of flexible payment options to pay back the loan according to your convenience. Once you are financed by the Oxford team, you will have access to a high standard of customer service and support throughout the life of your loan. Visit the Oxford Finance website on www.oxfordfinance.co.nz.

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