When you’re applying for a car or bike loan you want the best rate possible so you don’t end up paying more than you need to interest. Makes sense. In which case some people might consider shopping around for interest rates. This seems like a good idea in theory, however, shopping around could end up landing you a loan with a higher interest rate.
So What’s The Problem With Applying For Multiple Loans?
Here’s the low down:
- Every finance application creates a history on your credit report.
- Applying to multiple lenders over a short period of time can affect your creditworthiness.
- Lenders (banks included) do not like a ‘busy’ credit history and this may flag you as a credit risk to lenders.
- If you are flagged you may find the interest rate offered to you may be higher or you might be outrightly rejected by some lenders.
- If this happens you may have to accept a higher interest rate from a non-conforming lender (lenders who led to people with bad credit records).
How Do I Avoid Having A Busy Credit Record?
Glad you asked. We’re specialists in the finance industry and we source loans for all manner of vehicles everyday. If you want to get a better idea of your borrowing capacity, repayments and what sort of interest rate you might be eligible for you need to give us a call 1300 889 669. Better still if you apply online we’ll just get you the best rate possible – we don’t work for the banks, the dealerships or anyone else except you.