It may be possible to get a car loan with a single income.
Securing car finance isn't always easy. Particularly if you're on a single income. It can feel like the banks don't want to know you, just because you haven't got an additional income.
The good news is that while getting a car loan with a single income could be difficult, it is in many cases still possible, provided you follow these steps. Alternatively, click below to apply for a single income loan now.
Step 1: Check your credit score
Your credit score is generally an assessment of your credit-worthiness. It's something most lenders will look at when deciding whether to offer you credit. And it is sometimes the difference between loan approval and denial.
So before applying for a single income loan, we suggest you get a copy of your credit score to find out where you stand. You can request your credit score online and it's typically free.
A credit score of 622 - 1200 is generally what's referred to as 'good credit' and can make securing a loan significantly simpler. Whereas a score of 0 - 621 is generally considered below average or average; this doesn't necessarily rule out your chance of loan success, but a bad credit car loan may be a more suitable option.
Step 2: Get finances in order
Lenders are generally risk averse. Generally the more risky they see a loan application to be, the less likely they are to approve it. Some things which may turn off lenders include:
- Credit defaults
- Unpaid bills
- Late or missed payments
- Bankruptcy and part IX debt agreements
All of these things may be red flags for lenders. Some will dismiss your application out of hand.
So, before applying for any car loans with a single income, we suggest to take the time to get your finances in order. Clean bank statements and successfully met payments could substantially boost your car loan application.
Step 3: Prepare your case for finance
Generally many people do not know all the things which lenders assess when considering a car loan application.
Some believe they can't get a loan because their income is derived partly or completely from Centrelink. Or because they're on a pension. Or because they've declared bankruptcy.
But this isn't always the case.
Lenders generally consider a range of things when deciding on your loan. Some of which you may not expect. Including your:
- Job history
- Residential history
- Income (including Centrelink)
You may be surprised by what is possible when you focus on your financial strengths. That's why before applying for any single income loan, in most cases you should prepare and build your case for finance.
Step 4: Be flexible in your choice of vehicle
Your choice of vehicle could affect your capacity to secure a car loan with a single income.
If you're applying for a secured car loan, then your chosen car will be security on that loan. Generally lenders will prefer a car which they can easily resell should you default on the loan, such as a new vehicle from a trusted manufacturer with no after-market modifications.
Alternatively, if you're unable to secure a loan for the amount you want, it can be worth choosing a different car with a smaller price tag. You may also want to consider a used car.
By being flexible in your choice of vehicle, you may be able to widen your single income loan options. And, the good news is that choosing a different or lower priced vehicle doesn't always mean compromising on quality or safety.
Step 5: Use a car finance broker
Car finance brokers, like our team at Rapid Finance, are specialists in car loans.
You may not spend every day seeking out car loans, but our car finance brokers do. They generally know the in's and out's of the car finance process. Including how to find single income loan options.
Even if you've never used a broker before, they may be able to help. Consider them as your guide through the car finance process. They could help you to seek out options of which you may have been unaware.
A broker is not a lender. And as such in some cases they could assist when your bank won't.
"Getting a car loan with a single income could be difficult, it is in many cases still possible."
Apply for a single income loan today
At Rapid Finance, we are your car loan specialists. We have access to a wide range of lenders and loan products, including options for people seeking a car loan with a single income.
Our team could assist you in securing finance even if your situation is less than straightforward. You may be surprised. Contact us today to find out how you may be able to get a car loan.