If you're self-employed, securing proof of income can often be challenging. As many lenders typically want tangible proof of earnings, car loans might seem elusive, especially if your self-employment is in its early stages.
However, hope is not lost. With Rapid Finance, a firm with over 20 years of experience in assisting individuals across Australia, you're in good hands. Here are some expert guidelines to bolster your chances of obtaining that crucial car loan as a self-employed individual:
Seeking a low doc car loan? Start your free financial assessment now.
First things First:
Is the vehicle for business purposes?
If you're venturing solo and the car is for business-related activities, it's crucial to possess an ABN. This is non-negotiable. If you haven't yet acquired an ABN, ensure you do so before starting your enquiry into self-employed car loans.
Have you filed a recent tax return?
It's not uncommon for businesses to delay tax returns. As a result, you might be looking at a "low doc" or "no doc" loan. While many lenders are hesitant about these, there are alternatives. You can utilise "alternative verifications" for income proof.
For instance, if you're a self-employed bricklayer earning $1,000 a week with minimal business overheads, through alternative verifications, lenders can assess your bank statements, and deem your weekly earnings as $1,000. This could grant you a favourable chance of securing a car loan, even without a tax return.
What's the state of your finances?
Do you have a significant reserve of cash? A sizable deposit can significantly lower the loan-to-value ratio (LVR), thus increasing your odds of loan approval.
Can you back your loan with assets? Owning property or being on track with mortgage payments can enhance your prospects, especially for low doc or no doc loans. This is a testament to your stability and commitment to regular financial obligations.
Is your credit file devoid of defaults? A clean credit file boosts your approval chances. If there's a default, ensure it's marked as settled.
Do you have a commendable loan record? If your payment history for asset loans (like cars, boats, etc.) over the last seven years is pristine, your prospects for a new loan look even brighter.
Are you committed to complete transparency?
Honesty is pivotal when applying for a car loan. Avoid inflating your income or altering facts to enhance approval odds. Such actions might jeopardise your application, as lenders may perceive deceitful intent.
At Rapid Finance, transparency is key. Even if we can't assist immediately, we're here to provide invaluable guidance on augmenting your prospects for future car finance applications.
With over two decades of unparalleled expertise, Rapid Finance has been the go-to for aligning clients with the perfect lenders. In a vast majority of instances, we've successfully pinpointed the optimal car loan solution for our clients.