Can I get a car loan on casual employment?

Can I get a car loan on casual employment?

When applying for a car loan, casual employees often find themselves at a disadvantage because many of them can’t provide a PAYG payslip with consistent income due to varying weekly hours. Some casual workers receive a higher wage than full-time employees due to factors such as casual loading, which compensates them for benefits unavailable to them, such as paid leave. However, since they have no guarantee of continued employment, lenders tend to need more assurance from them that they can repay the loan. Casual workers who can prove they’ve been consistently employed and receiving wages for a considerable amount of time are likely to get a more favourable response from lenders.

Can you get a car loan with a casual job?

You can get a car loan on a casual job, but you need to check whether you meet the conditions set by lenders. You can also look to improve your chances of getting approved for a car loan by, for example, applying with the bank where you have a savings account. Many lenders may expect that you’d have been casually employed for at least six months to one year. If you’ve been working with the same employer for this time, getting a letter from them confirming your employment can help strengthen your case. Also, your earnings should exceed their minimum income criteria.

Lenders may ask you for proof of savings, which can tell them that you can set aside money from your income for loan repayments. This can be crucial if your wage payments are irregular and don’t allow you to regularly put away money every fortnight or month. Remember that lenders will typically use their calculations to estimate your income and ability to meet repayments. If you choose to buy a more affordable car, enabling you to borrow less, you may qualify for the loan more easily. You’ll also be able to borrow a smaller amount if you can accumulate savings for a few months to use as a deposit.

You can also check your credit score before applying for the car loan as an excellent credit score may help to convince lenders that you are a responsible borrower. You should look at improving your credit score if it is an average score. Having your car loan application rejected can affect your credit score and, as a result, the chances of future applications being approved. If you don’t have a high credit score and aren’t sure of how much you can afford to borrow, you may want to see if any lenders will offer a pre-approval. Although this isn’t a guarantee that you’ll get the loan, you can at least find out the loan amount that may be offered to you by the lender and plan your car purchase budget accordingly.

Do lenders offer special car loans for casual workers?

Lenders may not offer car loans specifically tailored for casual workers. On the contrary, they may see casual workers as being more at risk of defaulting or not repaying the car loan. They may try to offset this risk by charging you a higher interest rate on the loan or otherwise making the loan more expensive. Consider comparing car loan offers from different lenders and checking not just the loan fees and interest rates but also the documentation required and the repayment options offered. You can speak to one or more lenders if you find them offering suitable options.

If you can’t find a suitable lender, or you find that your chances of getting approved for a car loan are low, you needn’t lose heart. You can get advice about applying for a secured personal loan instead of a car loan, which involves using the car you’re buying as security. If you’ve taken out a home loan, you may be able to redraw from the mortgage to cover the cost of a car. This may also get you a lower interest rate given that home loan mortgage rates are currently lower than the rates for car loans. However, it’s important to understand that a home loan term is typically many years longer than a car loan term, so it would likely mean paying a significant amount more in interest charges over the life of the loan.

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What is a secured car loan?

A secured car loan is a loan that is connected to a form of security, or collateral. Generally, the security for a car loan is the car itself. If you fail to repay the loan, the lender might seize your car, sell it and then use the proceeds to recover their debt.

How do you get a car loan?

There are four different ways you can get a car loan. You can go straight to a lender. You can get a finance broker to organise a car loan for you. You can get ‘dealer finance’ – which is when the car dealer organises a car loan for you. Or you can organise your own car loan through a comparison website, like RateCity.

Whichever method you choose, you will need to provide proof of identification, proof of income and proof of savings. So you may be asked for any combination of passport, driver’s licence, bank statements, payslips, tax returns and utility bills. You might also be asked to provide proof of insurance.

Can I get a discounted student car loan?

Being a student is tough enough, and while you might find the odd student discount on movies and technology, the same can’t be said about car loans, as you can’t really get a discounted student car loan.

Lenders make money on the interest and fees that they charge with loans, and the lowest interest and fees are given to the most reliable credit holders: people with excellent credit history.

As a student, you are unlikely to have enough on your credit report to warrant an excellent history. There are however, ways of getting a lower interest car loan if you can’t get an interest-free loan from the bank of mum and dad. One way of doing this may be through getting a guarantor car loan, which can get you a secured car loan by setting your parents up as guarantors.

Can casual employees get car loans from ANZ?

Casual employment is common, and if you are a casual employee, it doesn’t mean that you’re not eligible for a car loan. But you’ll need to prove your repayment capability while applying for an ANZ car loan for casual employees.

Before applying, it’s important to consider the minimum eligibility criteria, which stipulates that a borrower must be an Australian citizen, permanent resident or have a valid visa, is at least 18 years old, and earns an annual income of at least $15,000. 

Also, applying for a loan amount lower than what you can afford and working for some months before applying could increase your chance of approval. If possible, consider submitting a letter from your employer that will prove income stability. Lenders are more likely to approve your application if you’re able to demonstrate your ability to save, reducing their risk.

What is a guarantor on a car loan?

A guarantor on a car loan is a third party, usually a relative or friend, who guarantees to meet the repayments of a loan for the purchase of a car, if the borrower/owner of the car defaults on the loan.

Guarantor car loans can be useful for people who would otherwise struggle in being accepted for credit to purchase a vehicle. These may include people with bad credit, students and young people who may have no credit history, as well as some pensioners.

Many lenders offer guarantor car loans, guarantor personal loans and guarantor home loans, because of the significantly reduced risk to the lender.

What is a guarantor car loan?

A guarantor car loan is a type of loan that features a guarantor on the agreement. The guarantor is a third-party individual, often a friend or relative, who guarantees the loan will be repaid if the borrower defaults on the car loan.

Guarantor car loans are often geared at people who might otherwise struggle being accepted for a secured car loan when purchasing a vehicle. Some of the reasons might include a lack of credit history such as with a student or young person, if there’s bad credit, or age as a factor such as with pensioners.

Can I get a car loan with poor credit?

Poor credit doesn’t necessarily mean you won’t be able to get finance for your car purchase, though your options aren’t likely to be the same as someone with good credit.

In fact, a number of specialist lenders exist offering car finance for customers with poor credit, able to provide access to bad credit car loans.

However having a history of poor credit will likely mark you as a potential risk to lenders, so your car financing needs could see higher fees and interest rates. Alternatively, consider a secured car loan, which is a type of loan that uses the car you purchase as collateral, reducing the risk.

Other options include getting someone close to act as a guarantor for your car loan, or to talk to a broker about a personalised rate specific to your circumstances.

Can I get a loan if I am on aged pension?

Yes, there are certain lenders that provide loans for people on aged pensions. Your viability for a loan will be assessed by a lender by your credit report and your income. They will also take into account any assets you have that you may want to secure the loan with. The better your credit score, the more likely you are to be accepted for a loan, and the lower the interest you will have to pay on that loan.  

If you have a bad credit rating and are on an aged pension however, don’t despair, because there are specialised lenders who still may be willing to provide you with a loan.

What are the pros and cons of guarantor car loans?

Like all things, there are positives and negatives to guarantor car loans, though one may outweigh the other depending on your needs.

Guarantor car loan pros may include that you’re more likely to be approved for a long if you have no credit or a history with bad credit, that you’re more likely to secure a car loan with a lower interest rate, and that because your guarantor car loan is based on a relationship, you will be more inclined to meet your repayment schedule.

However, there are negatives, as well. Guarantor car loan cons may include leaving a detrimental mark on a personal relationship with added strain if you don’t meet your repayments, and you may take out a loan that you can’t actually afford.

Weighing these pros and cons will give you a greater understanding of whether a guarantor loan is ideal for your circumstances.

Can I get a car loan with bad credit?

Yes, you can get a car loan with bad credit, although you’ll probably find the process trickier and dearer than that experienced by people who have good credit histories.

You can find a number of lenders that specialise in bad credit car loans. However, make sure you compare bad credit car loans before you sign on the dotted line, because not all car loans are alike and having bad credit may mean you are more likely to be hit with higher fees and interest rates.

If you have bad credit, it’s important not to take out a car loan unless you can afford the repayments because a default could further damage your credit rating. Conversely, if you make all the repayments and repay the loan successfully, your credit rating might improve.

Do I need good credit to get a car loan?

You don’t need good credit to get a car loan, although the worse your credit history, the harder and more expensive it’s likely to be.

Some lenders will do business only with borrowers who have good credit. However, there are other lenders that are willing to offer car loans to borrowers who don’t have good credit. The catch, though, is that they may charge higher interest rates and fees, and also require more paperwork.

If you don’t have good credit and want a car loan immediately, you can search for lenders that work with bad credit borrowers. If you are able to wait, you can work to improve your credit score and then apply for a car loan once you have good credit.

What is an establishment fee?

Some lenders will charge you an establishment fee, or one-off upfront fee, to cover the cost of setting up your car loan.

What is a commercial hire purchase?

A commercial hire purchase, or CHP, is an arrangement by which a finance company buys a car on your behalf. You get to borrow the car in return for making regular payments to the financier. Once the final payment is made, you take ownership of the car. 

What is collateral?

Collateral, or security, is an asset you agree to surrender to a lender if you fail to repay a loan. Generally, the collateral for a car loan is the car itself. So if you fail to repay the loan, the lender might seize your car, sell it and then use the proceeds to recover their debt.