Finances
What is the minimum credit score to buy a car in South Africa?
It is totally possible to get a loan to finance your new or used car purchase no matter how low your credit score is. To learn more, see the following post!
Advertisement
Complete guide with the best strategies to finance your new car with loans!
Most likely, you must love the feeling of driving a new car. To make that dream come true, you need more than the minimum credit score to buy a car in South Africa.
6 investments that pay monthly income
See your monthly income grow each month through investments that pay monthly income! Keep reading and learn more!
Below, read a guide with everything you need to know to pick up the keys for your new transport!
What is the minimum credit score to buy a car in South Africa?
Indeed, the minimum credit score required to buy a car in South Africa can vary. In fact, the threshold score is set individually by each lender.
Car type is also another factor that may require a higher or lower score. However, a credit score of 650 or higher is generally considered a good score.
If your credit score is less than 650, it doesn’t mean you can’t buy a car. Indeed, creditors may still consider your application. However, you may face higher interest rates.
In addition, payment terms may be stricter. You may also need to provide additional guarantees.
Finally, it’s important to note that lenders in South Africa don’t just look at your credit scores. So there’s a lot more to worry about.
You will be redirected to another website
Other factors considered in car financing besides credit score
In addition to credit scores, lenders will consider other factors when evaluating auto loan applications. Below are some of these factors:
- Income: Lenders will want to know your income to determine if you can afford the monthly car loan payments;
- Employment History: Lenders may also consider your employment history. This factor is important in determining your stability and ability to make payments. Indeed, a stable employment history can improve your chances of being approved for car finance;
- Debt-to-income ratio: This is the ratio of your monthly debt payments to your monthly income. Lenders will consider this ratio to determine whether you have enough income to pay off your car loan;
- Vehicle age: therefore, lenders may offer different rates and terms to finance new and used vehicles;
- Loan Amount: Lenders may have different requirements and fees for different loan amounts;
- Advance: this is the down payment you can offer when applying for a loan. In effect, a larger down payment can reduce the amount you need to borrow. This increases your chances of being approved for funding.
Top 8 highest paying jobs in South Africa
The updated list of professions that pay the highest salaries in the country may surprise many! Check it out to see our full list!
Options for those who do not fear the minimum credit score to buy a car in South Africa
If you have a low credit score, there are several options available. Find out about some of these below:
- Saving for a larger deposit: A larger deposit can reduce the amount you need to borrow. Thus, you can improve your chances of being approved for car financing;
- Opting for a cheaper car: Choosing a cheaper car can also reduce the amount you need to borrow. This can improve your chances of being approved for funding;
- Finding a Co-Signer: You can find a co-signer with a good credit score. This can increase your chances of being approved for funding. In addition, this can result in better terms and interest rates;
- Apply for a secured loan: A secured loan requires collateral, such as a car or property. This strategy can result in better terms and interest rates;
- Improve your credit score: Indeed, this is one of the best strategies.
It’s important to note that you may be offered higher interest rates and stricter payment terms if you have a low credit score.
Thus, it is important to consider car finance costs and ensure you can afford the monthly payments.
Ways to improve your credit score before buying a car
Indeed, improving your credit score before buying a car can help you secure better terms and interest rates.
Here are some steps you can take to improve your credit score and get you closer to your dream:
- Check Your Credit Report: Obtain a copy of your credit report from a credit bureau such as TransUnion, Experian, or Compuscan. Then check for errors or discrepancies and report them to the credit bureau;
- Pay bills on time: Make sure you pay all bills, including credit card payments, on time. Indeed, late payments can negatively affect your credit score;
- Reduce outstanding debts: Pay off as many outstanding debts as possible. As we’ve said, creditors look at your debt-to-income ratio. Therefore, reducing outstanding debt can improve your score.
- Use credit responsibly: don’t reach or exceed the limit on your credit cards. Lenders want to see that you can manage credit responsibly.
- Avoid opening new credit accounts: this can negatively affect your credit score. Lenders want to see a stable credit history. So, maintain a healthy credit history by using credit responsibly.
Bottom line
Improving your credit score can take time. However, this effort is worth it. After all, a good score can guarantee much more than good rates on auto loans.
In effect, there are only two types of people. Those who use the internet for fun and master techniques to profit on the net.
Making money on the Internet can be much simpler and easier than you might think, I can prove it! See the following post to learn how to earn money from home and online!
6 strategies to make money online in South Africa
The internet has virtually endless opportunities for you to earn money from your cell phone or computer. Read on and learn more about it!
About the author / José Gonçalo
Trending Topics
Unemployment Insurance Fund (UIF): relief for workers
Through the Unemployment Insurance Fund, South African workers can receive a pension of up to R17,712 for 12 months. Learn more here!
Keep Reading
Boodle Loans: find out how to apply!
Find out how easy it is to apply to Boodle Loans and immediately have the money you need! Up to R8,000! Keep reading and learn more!
Keep Reading
Absa Flexi Core Credit Card full review: should you get it?
The Absa Flexi Core Credit Card allows you to build your credit and receive up to 30% cash back on purchases! Learn more about this card!
Keep ReadingYou may also like
Apply for the Old Age Pension: find out how
Apply to Old Age Pension and get access to a benefit that guarantees quality of life! Up to R2,000 monthly!
Keep Reading
African Bank Credit Card full review: should you get it?
The African Bank Credit Card is a consolidated card option that offers 62-day interest rate waivers, life insurance, and more. Learn more!
Keep Reading
Nedbank American Express Gold Credit Card: check out how to apply!
Apply to Nedbank American Express Gold Credit Card and get 50% off services, products, and free airline tickets! Read on and learn more!
Keep Reading