Despite what you might have initially thought, you are actually able to get finance for a car although you have been blacklisted or have a bad credit record. Many companies are able to get you driving brand new cars like a Volkswagen Polo Vivo or Toyota Yaris even if you are blacklisted (have a bad credit record). We would advise that you not actually get car finance and are blacklisted if you are not able to afford it. This would defeat the purpose of you getting a car. You have to be able to pay the car off.
So how does car finance for blacklisted people work?
Well, you know that you are able to rent a car, now what you able to do is rent a vehicle on a purely rent to buy or rent and buy later deal.
How much will you pay for vehicles on blacklisted finance?
You can get a Polo Vivo for less than R4 000, or how about a Mercedes for less than R8 500 a month? Well, most of these require a big deposit. Think 20% of the value of the vehicle. All these options vary, of course, based on what you qulify for and how your bad credit looks like. You are able to drive a good car if you are able to pay it off, and pay off your debt as well. Interest rates will be higher that with a traditional car finance as you are still a risk to them, and expect to pay between 14% and up to 20%, depending on who you get. Do apply to as many as you can so you can compare companies that provide car finance for bad credit.
There are other rules that apply to who will qualify for car finance. And per usual they include: you may not be on judgement or be a sequestrated individual, you must be fully employed for more than 3 months, you must have a bank account with your salary being deposited into that account, you must be a citizen of South Africa and have an ID. But these are standard requirements that you must fulfill. Please also make sure that when they do an affordability assessment that you are actually able to afford a vehicle at these interest rates. Whether you can get car insurance for this is another story.
Finding a loan while you have been listed on creditors bureau’s bad books can be difficult. A person who has a bad credit record will find it difficult to find a loan for the most important things like a car loan and home loan. We will discuss what options people have in getting loans from registered credit providers.
The National Credit Regulator (NCR) was formed to fulfill the requirements of the National Credit Act 34 of 2005. The act aims to:
provide for the general regulation of consumer credit and improved standards of consumer information
prohibit certain unfair credit and credit-marketing practices
promote responsible credit granting and use and for that purpose to prohibit reckless credit granting
provide for debt re-organisation in cases of over-indebtedness
regulate credit information, among other details which you can read here
Although you may be blacklisted the act helps credit providers from putting people into even more debt without exercising the debt they are currently servicing. Be that as it may, you may still go and seek a loan from registered credit providers who will need to also work carefully not to put you in even more debt, or debt that you can’t service.
So, what ways can you get a loan even though you are blacklisted?
You may look for credit providers who will review your credit score and establish if even though you have a bad credit record they may be able to lend you money. Be careful that they are registered by searching for them on NCR database. Being a blacklisted individual may also attract a higher interest rate as you are still a risk.
You may apply to consolidate three or four major debts and reduce these by hundred or thousands or Rands a month. This is because a debt consolidation loan takes one major loan for all your major debts such as personal loan and credit card loans. You now will have only one loan with a stable interest rate. You may be asked for collateral such as your home, but this will depend on your debt and credit provider.