Frequently Asked Questions
> What
is LIBOR?
LIBOR refers to the London Inter-Bank Offered Rate. This is the amount
of interest applied to money that banks borrow from the inter-bank
market. The rate is set everyday based on economic conditions and
is used by lenders as the basis for their respective base interest
rates.
> Can I still be approved for a car loan if I have
bad credit?
There are loan companies that specialise in bad credit car loans.
You are assessed for a loan primarily on the basis of your present
financial situation, not on your credit history. Credit rating
is still a factor; a bad rating will mean that you will be considered
a high risk, resulting in higher interest rate charges.
> Am
I eligible for a car loan if I’m self- employed?
Loan companies will lend you money even if you’re self-employed,
depending on whether you meet certain conditions which vary from
lender to lender. Banks and building societies might need you to
have been in business or working for yourself for a specific number
of years in order to accept your application. Specialist lenders
that offer easier criteria to meet may end up charging you a comparably
higher APR.
> When
will I find out if I’m approved?
This depends on the particular lender you are applying for a
loan with. Some return results by the next business day while
others
take as long as six to eight weeks. It also depends much on
your own financial
situation. Credit history, employment record and other debts
are all factors that the lender will consider when determining
whether
or not to approve your application.
> Will the loan company give
me an explanation if my application is rejected?
Normally the lender will not give you a detailed reason why
your application is rejected. According to them, this is
in order
to protect against fraud. In any case, most loan companies
actually refer to
a credit scoring system provided by a third-party agency
to assess your level of risk.
> Can I settle my loan early?
Some loans allow repayments within the terms and conditions
you agreed to when taking out the loan. In some cases you
may be
allowed to
redeem your loan early but you will be subject to an early
payment penalty.
