Having a bad credit history doesn’t mean you cannot drive around in a van. In the UK today, there are many specialised van financiers providing van finance with bad credit to people who need a vehicle but who have a bad financial past.
If you are an entrepreneur in need of a dependable van for your business or even a family man who needs a van for the comfort of his family, securing finance from Car Loan First is easier than you might think, especially if you use a broker familiar with this firm.
Why Is It Harder to Get Van Finance With a Poor Credit History?
Credit file reviews by lenders indicate how risky they think it will be to lend money to a certain individual. Late payments, defaults, and even county court judgments could put off traditional lenders from considering your application.
However, it’s not quite the end of the world if your bank refuses. There are some lenders who don’t base their decision on a credit score alone, but instead assess an individual’s financial standing based on current earnings and expenditures.
Criteria for Defining Bad Credit Finance Van Loans
Bad credit van loans are finance arrangements created with customers with a bad credit background in mind. Rather than just concentrating on the negative side of the credit report, lenders consider how you can afford the loan today and if you have the means to make payments regularly.
Typically, the finance arrangement is offered under Hire Purchase terms, which means that you will repay the total cost of the van through regular monthly payments until full ownership of the vehicle is acquired.
How Do You Increase Your Chance of Approval?
Approval is not based on chance. Simple actions done beforehand will help your chances of getting approved.
- Go through your credit report for any errors and have them fixed.
- Enrol yourself on the electoral register.
- Do not apply for multiple loans within a short while.
- Have evidence of a stable source of income.
- Make sure you put down a bigger deposit if possible.
- Consider getting a guarantor to help with your loan application.
What Documents Would You Need When Applying?
The majority of lenders require almost the same documents regardless of your credit profile. Having all the required documents prepared upfront will save you a lot of time.
- UK driving licence that is still valid
- Proof of address, e.g. utility bills or bank statements
- Documentation regarding your income, payslips or bank statements
- Information on your employment situation
- Bank account information to set up repayment procedures
Is It Possible To Buy A Van On Finance With Poor Credit Rating?
Indeed, and more often than most car owners think. At the same time, an application for van finance with a low credit score is different from a regular loan from a bank, as the former involves assessment by a specialised lender based on the affordability of the payments, not on a single figure.
In other words, even if the answer from your bank is negative, a specialised lender can give you a positive one, depending on the actual amounts of payments you can afford to make.
Why Are There Benefits to Choosing a Specialist Broker?
One bad year should not determine your whole financial future. There are several benefits to choosing a specialist broker instead of going straight to one lender.
- Higher chances of being accepted than with usual high street lenders
- Flexible repayments depending on your monthly income
- Opportunity to improve your credit rating through timely repayments
- Quick online application and decision
- More variety in vans, both new and used ones
Is It Possible For Self-Employed Drivers To Be Approved As Well?
While self-employed workers may be concerned that their unpredictable income may affect their chances of getting a loan, the fact is that most lenders do not have any problems dealing with people who are self-employed. They will usually require documentation such as tax returns, business bank statements, or an accountant’s letters to prove that you have steady income.
Another advantage which might pass one by is that paying your instalments on time will reflect on your credit reference. This will eventually lead to rebuilding your credit history, thus enabling you to get better offers when looking to purchase van finance in the future, or maybe even caravan finance for family holidays.
Which Van Are You Likely to Be Able to Get Financing For?
Poor credit won’t leave you with only a select few vans to choose from. As most expert lenders will lend on many different types, sizes, and price ranges of vans, you can get one that’s suitable for your needs or job.
- Used vans from approved dealers
- Low-mileage vans which are near new
- Small vans for urban areas, large panel vans for heavy-duty tasks
- Trade, delivery or business vans
- Electric and hybrid vans from participating lenders
Price and affordability will be far more important than the type of van in question.
Get Your Business Up and Running Again
Poor credit should not mean that your work, or your home life, comes to a standstill. There are many drivers in the UK who manage to arrange financing on a vehicle each and every month, as long as they come to the right company with their information and some preparation.
Car Loan First is here to make this easy for you. We do not provide loans ourselves; we are a broker that has a relationship with a wide range of FCA-regulated companies that have experience in arranging finance for people with different credit ratings. This means that you will not have to complete several forms to get answers from several places, and whether it is a new or replacement van, there is no need to wait for days before receiving an answer.
Worried about what you could be eligible for? Apply now via our website and get a free, no-commitment quotation.
Frequently Asked Questions
Can I obtain van finance if I have a CCJ on my record?
In most cases, yes. Specialist lenders may be willing to consider your application based on how recent the CCJ is on your record and your current financial situation.
How soon can I get approved for van finance with poor credit?
Most specialist lenders provide quick decisions, sometimes within minutes after your application has been made online, and funding may be arranged within a couple of days after that.
Will applying for van finance impact my credit rating?
The soft credit check, made during the quotation process, does not affect your credit rating, whereas a complete application normally involves a hard search and impacts your credit rating. Using a broker helps reduce the number of hard searches.
Is there any way I can part-exchange an old van while financing a new one on bad credit?
Yes, most financiers will allow for a part-exchange, and the worth of the van can help decrease the amount of deposit that you have to pay. It is best to get your old van evaluated to be sure of its worth.
Is paying more money on a deposit beneficial to my application?
Yes, mostly because the bigger the deposit, the less you will need to borrow and hence lower risks to the financier. It does not necessarily mean that you will definitely get the finance because you have paid a larger deposit.
