After exploring the market and shopping around with different dealers, you have finally decided to finance your car through Hire Purchase car financing option. It’s the best deal that you can secure and you feel all too excited about embarking on a new journey on wheels.
But, you are a little nervous.
“What if my application for HP gets disapproved?” you wonder.
Don’t worry for we are here to help you guide through all the pre-requisites that you need to make your application get the needed approval.
Check Your Credit File
The first thing that you need to look at before submitting the application for a HP scheme is your credit file.
Look at your bank account details, previous credit transactions, status of different debt accounts and all your line of credits. This will help you in forming an opinion about your credit score. If you have a bad credit, try to resolve it if possible before applying for a HP scheme. If you think it cannot be repaired, include a notice of correction along with that particular line of debt.
You can also boost your chances of getting the application approved if you have bad credit by applying for a joint car financing deal.
It’s not only your current and previous credit status that can affect your credit score; it’s also other specifics like your residential address that can have an impact on your credit score. Credit reference agencies sometimes are prone to errors like listing you at an address that does exist. So it is always advisable to thoroughly check all other specifics on your credit file along with financial data to avoid any mishap.
Check Your Finances
Next thing you need to look at is the finances that you would need, first of all to pay an initial deposit which is usually 10 percent of the total car value and then the monthly installments that follow it. Since the monthly payments are fixed, you can work out your entire budget that you would be allocating for your car finance and see if you have the means to cover for it.
Organize the Documents
Once you have made assurances that your credit status and finances won’t hinder in the approval of your HP application, you now need to look at the documents that you have to provide along with your application. In this section, we will only look at those documents that can make or break your application process.
Proof of Residence
In UK, in order to get a HP deal you have to provide proof of your UK residence of last 3 years. Failing to do so would definitely impair your chances of getting a HP car finance deal. But if you can provide a genuine reason for that, your application may get the necessary consideration. For instance you may have only moved in recently, so you can provide a reference of a guarantor that complies with the above law.
UK Driving License
Although driving license is not deemed compulsory while submitting an application, not having one can increase the chances of disapproval.
Miscellaneous and the Sundries
Apart from that you will have to provide with your bank statements, personal details and proof of income.
Getting your hire purchase approved is nothing to stress about. It can be achieved easily as long as you remain honest in your dealings and account for what you are applying for.