If you are on a debt management plan, you can still apply for car finance. You’ll just need a bit of extra support.
Looking for a new car can be a lengthy process, especially when you’re struggling with financial difficulties. And if you’ve been unable to manage your credit in the past, it can have an impact on your ability to secure car finance now. This is because being on a debt management plan (DMP) will have an impact on your credit file and therefore your eligibility.
Finding a lender that will understand your situation is one thing. But finding end-to-end support throughout the process is another.
How can we help?
At We Finance Any Car, we offer tailored bad credit car finance for a range of circumstances. This means you will have access to specialist lenders, increasing your chances of approval. It also gives you more flexibility when finding a suitable finance agreement.
With the right knowledge and guidance, applying for car finance while on a DMP is possible. We’ll talk you through all the ways that a DMP can affect your application.
What you can expect:
Financing a car shouldn’t be so complicated. Check your eligibility and discover affordable payment plans today.
Yes, but there are a few things to bear in mind.
When you are on a DMP, you will have limited flexibility when it comes to making a sizeable purchase. And, because the aim of this plan is to ensure that all outstanding debts are paid, you will need to effectively manage your spending. As a result, your DMP provider will review how essential the purchase is.
This includes a new car…
Another factor to consider is your credit rating. The combination of having a high level of debt and being on a DMP will lower your credit score, as well as show up on your file. Unfortunately, this sends a signal to lenders that you may not be in a position to meet the monthly payment deadlines.
In other words, you’re at a higher risk.
So, what now? Apply through We Finance Any Car.
Although a DMP will make things a little more challenging, it shouldn’t prevent you from applying – as long as you’ve had a discussion with your DMP provider first. And with our bad credit solution, you’re in the best hands possible.
Whether you’re currently under a debt management plan or have an IVA on your credit file, we can help to get you back on the road to car ownership.
Another factor to consider is whether or not you have the budget for a new car.
Under a DMP, you will be required to make regular payments to your creditors. Adding another financial commitment to the pile can create more strain. So, it’s important to prove that you can afford to take on a car finance agreement.
This will help to:
What are the consequences of not meeting your agreed-upon payments?
It’s important to note that buying a car outright won’t require any permission from your DMP provider. However, financing a car will. This is because you will be required to make set monthly payments over a period of time, putting further pressure on your finances.
Determining how essential a new car is will all depend on your personal situation.
Below are a few things to consider:
If you have answered yes to any of the above questions, it might be worth looking into a new car. Being able to prove that it’s essential to the everyday is key. Otherwise, your provider may not grant you the permission you need.
Of course, every situation will be different and our expert team are on hand to offer some guidance. Get in touch today.
When reviewing your application, one of the first places a lender will look is your credit file. This will give them an idea of your credit history and current financial situation. Being on a DMP can have a significant impact on your eligibility – lenders may be reluctant to accept your application or you may be subject to less favourable rates.
Here at We Finance Any Car, we set you up for success.
That’s why we use an initial soft credit search to check your eligibility. This protects your credit score while giving the lender everything they need to make an informed decision. We also take several other factors into account, as well as your creditworthiness. These will include your income and employment stability.
This comprehensive assessment gives us plenty of information to take to lenders, helping us to find you a manageable payment plan.
We have a range of car finance types to explore, including bad credit options.
As with any car finance application, the type of plan you can apply for depends on your financial situation and personal preference. Consider factors like your monthly budget, your credit score, and how much flexibility it offers.
Add a DMP to mix and you may face a few more restrictions.
Although this can limit your choice somewhat, we will work with you to find a deal that suits you.
A debt management plan (DMP) is an informal arrangement that helps you better manage any outstanding debt.
Your DMP provider will review your financial situation and negotiate a payment plan with your creditor. This will typically involve reduced and affordable monthly payments over a period of time. The amount you are earning each month, plus your outgoings, will be taken into consideration here, ensuring you can comfortably meet the deadlines.
As opposed to paying the creditors individually, you will make one monthly payment to your provider. They will then distribute the payments on your behalf.
Don’t panic too much! If you have an existing car loan, it will likely be factored into your overall DMP.
As part of the negotiation, your provider will likely ask for a lower interest rate or reduced monthly payments. This is to ensure you can still afford the loan, within the constraints of your DMP budget. Your creditor may even agree to freeze any additional fees associated with your car finance agreement, although this will vary from case to case.
As long as you keep up with the new payment plan, you should be able to keep hold of your car.
Mon to Fri: 08:00 – 19:00
Saturday: 09:00 – 16:00
Sunday: 10:00 – 16:00
