Van finance offers a practical alternative for those looking to buy a van online without the need for an immediate full payment. This method presents various options like Finance Lease, Hire Purchase, and Business Contract Hire, accommodating different purchasing preferences and needs. When applying for van finance, much like securing a loan or credit card, a credit check is a standard part of the process. This step assesses your ability to manage the monthly payments. Although obtaining van finance with bad credit can be challenging, it is not out of reach, providing an avenue for those exploring online options to buy a van under different financial circumstances.
The process of applying for van finance is similar to a loan or credit card which means that the finance lender will need to perform a credit check to gauge whether you can comfortably afford the monthly payments you’re signing up for. While it may be more difficult to get bad credit van finance, it’s still possible.
Exploring Bad Credit Van Finance: Securing New Van Deals with Less-Than-Perfect Credit
Bad credit van finance can be a beacon of hope for those who have experienced challenging financial circumstances or past missteps and are now aiming to rebuild their credit score. In this blog, we delve into effective strategies to enhance your creditworthiness, thereby boosting your chances of securing finance options, even in the realm of cheap van sales. Improving your credit score isn’t a straightforward task, and while not every lender may accommodate bad credit scenarios, there are lenders in the market who specialise in these situations. These lenders can be particularly relevant when exploring new van deals, offering solutions tailored to varying financial histories.
What Information Is Needed For A Van Finance Application?
When you apply for van finance, whether it’s through traditional methods or when you opt to buy a van online, you’re essentially entering an agreement where you’re renting a high-value commercial vehicle and paying a fraction of its cost each month. This arrangement means that the finance company takes a significant risk by lending you the funds and relying on your small monthly repayments.
To evaluate whether they should take this risk, finance companies need to thoroughly assess your financial situation. When you apply, especially in the context of an online purchase, you’ll be required to provide specific information. The exact details needed can vary, as each finance company has its own criteria and requirements for applicants looking to buy a van online.
Securing Business Van Finance: Navigating Your Options for New Van Offers
When applying for van finance as a business, such as a limited company or a sole trader, the finance lender will typically require the following details:
- Company details – including the name, address, company registration number, and annual turnover.
- Director details – encompassing the director’s name, date of birth, and marital status.
- Business bank details – specifying the bank name, account number, and sort code.
In certain situations, particularly if your business is newly established or you’ve faced previous refusals for van finance, you may need to provide additional documentation. This is especially true if you’re considering the option to buy new vans outright, which often necessitates a more rigorous financial assessment. The extra information might include:
- 3 months’ business bank statements
- Management accounts
- A director’s guarantee
This thorough evaluation is part of ensuring financial stability and capability, crucial when making significant investments like purchasing new vans outright for your business. Check out our finance options for businesses.
Personal Van Finance: Exploring Van Deals for Individual Buyers
When applying for van finance as a private individual, which can be a stepping stone to acquiring one of the cheapest new vans on the market, the finance lender will normally ask for a range of details. This includes:
- Personal details – covering aspects like marital status and number of dependents.
- Address details – requiring a history of at least the past five years.
- Employment details – spanning at least the past three years.
- Bank details – such as the bank name, account number, and sort code.
- Monthly income and expenditure – detailing all salaries and regular bills.
This comprehensive information is crucial for verifying your identity, understanding how you’ve managed your financial commitments in the past, and evaluating your ability to make timely payments. This is especially important when aiming for economically priced options like the cheapest new vans, as lenders may require additional employment history and a detailed account of your monthly income and expenses, especially if you’re not currently in full-time employment. Check out our finance options for individual buyers.
Tips for Success: Boosting Your Eligibility for Van Finance with Bad Credit
The information you provide in your van finance application plays a crucial role in the lender’s decision-making process. This data is used to reach out to credit reference agencies, which in turn helps to calculate an overall credit score for your business or for you as an individual. This credit score is a key factor in assessing your eligibility for various financing options, including new van deals. The lender then compares your credit score against their threshold to determine if you’re a suitable candidate for their finance offers. This evaluation is vital in deciding whether they’re willing to offer you the funds needed to proceed with a van purchase.
If you’ve got bad credit, you can try to increase your chances of getting accepted for bad credit van finance.
Put Down a Higher Deposit
The more money you can put down initially will reduce the amount that the finance company has to lend you which automatically reduces the level of risk you pose. In addition, it means that your monthly payments will also be lower, making your van finance agreement more affordable.
Get a Guarantor When Buying a New Van Outright
A guarantor is a third party who agrees to make the monthly payments if you can’t afford them. The guarantor will need to have a strong credit profile and act as a safety net for the finance company – it can strengthen your application if you have bad credit.
When applying for van finance with a guarantor, the finance company will usually ask to see the guarantor’s financial information as well as yours to determine whether they are financially able to cover any defaulted payments.
Joint Applications Help to Secure Your New Van Deal
Similarly, you could submit a joint application for van finance. This normally happens when one of the applicants has a poor credit history and the other doesn’t; increasing the chances of successfully applying for finance for the person with bad credit.
A joint van finance application can only be submitted by people living at the same address. With this option, both the applicant’s incomes are combined and both parties are responsible for the monthly payments.
How To Improve A Bad Credit Score for Better New Van Deals
Having a bad credit score can complicate the process of applying for any form of finance, including new van deals. However, there are several steps you can take to improve your credit score:
- Pay all your bills and invoices on time – Timely payments are crucial for a good credit score. Setting up Direct Debits for recurring bills can ensure you never miss a payment, which is especially important when you’re looking to secure favourable new van deals.
- File annual returns and financial accounts on time – Keeping your financial records up-to-date not only helps you stay organised but also demonstrates financial responsibility, a key factor for lenders offering van finance.
- Limit the number of loans you’re paying – Having multiple loans can increase the risk perceived by lenders. Reducing the number of loans can improve your credit profile, making it easier to secure attractive new van deals.
- Request your credit report – Regularly checking your credit report for any inaccuracies and addressing them promptly can help improve your credit score, thereby enhancing your eligibility for van finance.
We would love to help you in any way that we can. We have expert trained staff that will be glad to answer any questions or queries that you may have regarding finance options and to discuss if we can serve you a van deal based on your current financial situation. Simply contact us or give us a call on 01633730219.