Can you get a car loan if you are blacklisted in South Africa? How do you get vehicle finance with no deposit to pay? There are ways to borrow money if your credit score is low. So If you have had trouble with debt recently but you desperately need to buy a car take note of these car loans available for people with a bad credit record.
Car loans for blacklisted people to apply for in South Africa:
- Use your bond or home loan to finance your car
- Inhouse finance from vehicle dealerships
- Blacklisted personal loans
There are many other options for financing a vehicle if you are blacklisted. But these three are some of the most likely options.
Whatever option you choose it is absolutely essential that you do not get further into debt. Therefore make sure that you can afford what you are signing up for. And that you always pay the payments in full every month without exception.
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Use your Bond or Home Loan to Finance your Car
If you have an existing bond or home loan on your property you can apply to borrow money on your bond or home loan to finance your vehicle.
This is a good option as the interest rate will be lower than most car loans.
However if your financial service provider will not allow you to borrow against your bond or home loan you can apply for a home loan extension.
If this is approved you will be able to pay less in your monthly payments. And you will have freed up money that you can spend on financing your vehicle.
Inhouse finance from Vehicle Dealerships
Many vehicle dealerships offer in house financing to buyers. So may be able to offer you a special deal even if you are on the blacklist.
You should contact your dealer and speak to him or her about your options. Because they may be willing to tailor make a car loan package that will suit your needs.
Blacklisted Personal loans
There are lenders in South Africa who will offer personal loans to individuals who have been blacklisted. However the downside is that your interest rate may be higher than it would be if your credit score was better.
It is important if shopping in this category to be very wary about potential loan shark agencies.
Another option for financing your car is to take a loan from a friend or family member. You can involve a mediator who will help you set the terms and conditions. Including length of loan the amount and interest rates.
You should ensure that you draw a contract of sorts up. So that you can both protect your interests if things were to get messy.
Why is it difficult for blacklisted individuals to get credit of any kind?
When you sign a contract stating that you will pay off a loan or credit card or every month with interest you have to do so by law.
In many instances people suffer the loss of a job. They find they have too many expenses and cannot pay them all. Or they receive a very large one off bill payment that they cannot pay.
This may mean that they cannot make their loan or credit card with interest and this is never a good situation to be in.
The lender who gave the individual the credit will then serve warnings and eventually they may blacklist them.
The blacklist is a list that all financial service providers have access to. It lists individuals who have been guilty of serious and severe non-payment, under or late payment. And alerts any potential creditor that the individual is a financial risk.
Most reputable financial service providers will not even think of financing any individual that has such a low credit score.
Loan Shark Lenders Online Offering Car Loans for Blacklisted People
There are loan shark lenders that will be more than happy to offer car loans for blacklisted individuals and should be avoided at all costs.
Because these companies will charge extortionate interest rates that compound very quickly. Sometimes to as high as 1000 %.
They have also been known to use devious methods to get their money back from individuals who cannot pay them.
You can read more information on the dangers of loan sharks on this webpage: https://en.wikipedia.org/wiki/Loan_shark
However there are some lenders in South Africa who will offer small loans or low risk financing to people with a low credit score. So it is necessary to seek these offers out if you are blacklisted and looking for car finance.
To Summarize
In summary we have learnt that you can still get a car loan if you are blacklisted. Although you won’t be able to qualify through the usual channels such as the banks.
So if you don’t own a house to borrow against your home loan have a look at the online lenders offering personal loans.
Or look into the dealerships in your area that offer vehicle finance to people who have a low credit score. They are out there. And some of them offer car loans with no deposit.
A final thought on car loans for blacklisted people in South Africa is to look into rent to own. You can find out more information about what a rent to own vehicle is on this website: https://www.investopedia.com/articles/personal-finance/082315/renttoown-car-how-it-works.asp