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There’s no set number. That’s because borrowing capacity differs from person to person, as well as lender to lender.

Lenders don’t give out car loans unless they’re confident they’ll be repaid. Each person is different, so the amount of money one person can successfully borrow will differ from another person’s number. Also, each lender uses its own formulas to calculate borrowing capacity – so Mr & Mrs Smith might find that while Lender X will give them a car loan for $20,000, Lender Y will offer only $18,000.

An unsecured car loan is a loan that is not connected to a form of security, or collateral. Not all lenders provide unsecured car loans – and if they do, they generally charge higher interest rates for their unsecured car loans than their secured car loans.

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.

A redraw facility allows you to re-borrow any funds you may have repaid ahead of schedule – although conditions and fees often apply. Not all car loans come with a redraw facility.

Student car loans are not a necessarily a product in and of themselves, what you may be looking for is a guarantor car loan.

Going guarantor on a car loan is no new thing, before internet based  credit scores most people got loans based on a guarantor/property owner who vouched for the person borrowing the loan and was willing to stump up the payments should they default on the loan.

If you have been previously denied for a car loan, it doesn’t necessarily mean that you will be denied from the next application you make. Bear in mind that applications, or “hard enquiries” remain on your credit report for 2 years, but only affect your credit score for 1.

There are some steps that you should go through however before you reapply:

• Check your loan denial letter, gauge the reason(s) for your rejection. These may be:

• Your credit score is too low

• Your income was too low

• Your debt-to-income ratio was too high

• If you were unemployed or had only been in your current employment a short time

• Review your credit report

• Check for errors and file a dispute if there are any

• Make steps to improve your credit

• Review your providers and select a lender that advertises for your credentials

Try not to over-shoot your application based on a low advertised interest rate. Only apply for loans you can realistically be accepted for.

Yes, having bad credit does not necessarily mean that you will be denied car finance. You can find a number of specialist lenders for bad credit car finance. Compare bad credit car loans before you buy though, because not all car loans are unlike and having bad credit may mean you are more likely to be hit with higher fees and interest rates.

Some companies will advertise no credit check car loans, however all lenders are required by law to make sure that you are able to feasibly repay the loan, so be wary of lenders who offer loans without credit checks. They may not be reputable and their rates are likely to be higher than those of other lenders.  

Depending on your income and credit history, you may qualify for a low interest StepUP loan from Good Shepherd Microfinance.

There are companies that claim to offer no credit check car loans. However, you may find that companies that offer no credit check car loans have high fees and high interest rates. You might be better off finding a specialist lender who will look at your credit history and income, who will decide whether or not you are able to responsibility pay back the loan. Alternatively, you could contact a car finance broker.