These days, bad credit van finance is readily available and can be surprisingly affordable. Irrespective of the type of vehicle you need and how quickly you need it, there’s a good chance the keys could be yours within days.
Nevertheless, there are several important questions worth asking yourself, prior to getting your application underway. So, for anyone considering a bad credit van finance application, here are five key points to ponder in the meantime:
1. Do I have to make a balloon payment at the end of the loan?
First up, there are various different types of bad credit van finance available. Some of which incorporate a balloon payment at the end of the loan, which must be paid to take ownership of the vehicle. You repay the balance on a monthly basis as normal, but you only become the rightful owner of the vehicle after making an agreed balloon payment at the end of the term. The size of which will be determined by a variety of factors, including the value of the vehicle, depreciation, the size of your monthly repayments and so on.
2. Can I pay the loan off early and will it cost extra to do so?
You may find yourself in a position where you can pay off your loan and wrap things up earlier than agreed. Most vehicle finance specialists welcome early repayment, though there are some who charge additional (and sometimes heavy) premiums for doing so. This is something that needs to be considered at the earliest possible stage, in order to avoid any unpleasant surprises later on. Flexible van finance agreements are always better than those with little room for maneuver.
3. What kind of deposit can I afford?
As a general rule of thumb, bigger initial deposit payments mean lower subsequent monthly repayments and a lower final balloon payment (if applicable). Even if your van finance deal is available with a 5% deposit or even a 0% deposit, it’s still worth thinking about making a higher down payment if you can. Of course, this isn’t necessarily the case with all lenders, so you’ll need to ask the right questions at the right time. An independent broker can also help you find the best deal to suit your budget.
4. Can I still qualify with bad credit?
If you have a poor credit history, it’s essential that you direct your applications exclusively at appropriate specialists. This is because any applications you submit that are rejected will inflict further damage on your credit score. Again, it’s worth speaking to an independent broker, rather than taking your business to any specific lender directly. This way, you can be sure your requirements and budget are matched with an appropriate lender and a competitive deal.
5. Are there additional costs to take into account?
Last but not least, lenders have their own unique policies when it comes to additional fees and charges. Examples of which include initial arrangement fees, administration fees, completion fees and any other fees they care to add into the mix. Needless to say, the fewer the fees added to the agreement, the better. From a financial perspective in particular, it’s important to know what you’re getting yourself into, rather than blindly signing on the dotted line.