Car loans for single parents
There are plenty of hoops out there for single parents in Australia to jump through, just to get from day to day. Having a reliable car becomes essential to get to work, do the school run, pick up the groceries from the supermarket and ferry the kids and yourself from place to place. The good news is that there’s no need to add "getting car finance" to your hoop collection. Here are some of the options you can consider if you’re searching for a car loan and are worried about your single parent status:
How do car loans for single parents work?
If you depend on a single income, perhaps from a part time job, and also look after the family, it can be worrying when you realise you do not meet the financial requirements that some lenders set. You may be surprised and pleased to learn that several different types of car loans for single parents are available from a number of lenders.
For example, if you are already receiving government funds from Centrelink and have a regular income, you may be eligible for a loan. You may be able to apply for no-interest loans if you are borrowing for goods or services deemed essential. With a regular income, you may be in a position to choose a short term or a secured loan to purchase a car. There are also charitable organisations that partner with banks to provide finance for single parents and families on low incomes for a range of purposes.
What are the features?
Interest rates may be fixed or variable, and some lenders offer flexible repayments, which means you may be able to make extra payments when this suits and repay your loan early without incurring penalties. Loan terms refer to the length of time you will have to repay the sum you have borrowed. These vary enormously and it’s usually possible for you to negotiate terms with your lender that suit your income level and cash flow. Often terms for variable loans are slightly longer than those for fixed rate loans.
At some point there are fees payable for arranging a loan, however some lenders charge more than others. You may be charged an application fee upfront, and then nothing further. Conversely, your loan may be awarded without paying a fee, but there may be monthly accounting charges to pay. Sometimes lenders offer additional features, such as a redraw facility or an extended warranty.
What are the pros and cons of car loans for single parents?
Getting help when you need it to purchase a car is obviously beneficial for you and your family. With the right deal, you can make the most of car ownership at an affordable price.
Be vigilant and aware, as sometimes lenders that are less than reputable will hike up fees and charges so much you will have difficulty meeting your financial commitments. Always check your eligibility with a potential lender before making a car loan application.