Revolution Finance Offers Advice On No Deposit Car Loans

Unlike a home loan, most customers don’t need to provide a deposit for a car loan.

This being said, you may be asked to provide a deposit if you:

• Have never borrowed money before,

• Have negative equity on your current car (you owe more on a loan for your existing car than it is worth),

• Have poor credit history.

Let’s have a closer look at each of these scenarios…

never borrowed money before

If you've never had finance before, you won’t have a credit file and chances are you'll need to pay a deposit. Here's why:

All finance providers conduct a full risk assessment for each loan. As a customer with no borrowing history, the lender isn't able to look at your history of loan repayments to judge your track record and your likelihood of non-payment. They don't know that you will pay back your loan without having any defaults, so they may ask for a deposit on the loan to offset the risk of lending funds to you.

HAVE NEGATIVE EQUITY ON YOUR CURRENT CAR

If you've financed a car, and the value of the asset has since fallen below the outstanding balance of the loan, this is considered negative equity. This happens when the value of your car is dropping faster than the balance of the loan, your vehicle is destroyed, lost or stolen without sufficient insurance, or you paid more for the car than it was worth.

If you're planning to buy a new car but have negative equity on your current car, its likely you will be asked for a deposit. This being said, we have lenders on our panel who offer great solutions for negative equity loans and can offer no deposit solutions.

HAVE poor CREDIT HISTORY

As with negative equity and no credit history, lenders will look to offset any risk when financing your vehicle. If your credit history shows that you have had trouble paying loans in full or have gone personally insolvent, banks and finance companies will be less willing to lend you money without a deposit to offset the risk. In other words, you should expect you'll be asked for a deposit. If coming up with a deposit isn’t possible for you, we do have no deposit finance options for poor credit, however you should be prepared to pay a higher interest rate to offset the risk.

is each lender different?

Absolutely. Our lenders have no deposit options, so even if you have negative equity or no credit history we may still be able to find you a loan with minimal or no deposit, if that's what you are after. As these applications are assessed on a case-by-case basis, the easiest way to get started is to speak with one of our expert consultants.

Revolution Finance has the best car loans available in todays market and our innovative process will get you in your car quicker. Apply online now or call 1300 882 851.