How long do I need to work for before I can get a bad credit car loan?
6 months is the ideal amount of time you should work for before applying for a bad credit car loan. However, you may be eligible sooner or later depending on some factors.
Employment factors which can affect your ability to get a bad credit car loan
- Employment history
- Evidence of employment
- Income from employment
- Type of employment
For the best chance at successfully obtaining car finance, you should understand these four factors and how they can affect your car loan application. Here are the details.
Note: includes information for people applying for bad credit car loans on Centrelink payments.
1. Employment history
Lenders are largely in the business of assessing risk. They do not want to lend funds to people who cannot pay the money back.
Therefore they spend a lot of time considering the perceived risk of loan applications. Simply put, the riskier your car loan application seems to lenders, the less likely it is to be approved.
Employment history can be a strong indicator of how much risk is involved in a car loan application.
If you have a history of regular work and steady income, then your employment situation will be deemed to be less risky. Your consistent employment demonstrates stability and on-going income of funds.
This is also why car loans for unemployed people are generally not possible. The lender wants to see that you have a regular income and that you have you have the ability to keep that regular income coming in.
If you're reentering the workforce after a period of unemployment or if you're entering the workplace for the first time, it is advisable to wait 6 months before applying for your car loan. That way you can build up a solid employment history and will be more likely to get approved.
When applying for bad credit car loans on Centrelink payments, you'll also need to include your Centrelink payment history.
Finding car loans for unemployed Australians isn't always possible. Getting a car loan with a new job and poor credit isn't always easy either. But, we could help.
Find out more on our bad credit car loans page.
2. Evidence of employment
Before applying for your bad credit car loan, you'll need to gather your evidence of employment.
In some cases, this can take a couple of weeks, as firstly, you will need to obtain payslips. If you're paid on a monthly basis, then this could take longer, unless you arrange to receive your payslips early.
You'll also need to speak with your employer. Lenders will contact them as part of their car loan approval process. This is to confirm that the employment details you have provided are correct.
For bad credit car loans on Centrelink payments, you will also need to provide evidence of your Centrelink entitlements.
Can I get a bad credit car loan during my probationary period?
Some lenders will not approve applications from people who are still within their workplace probationary periods. That means you could wait 3 - 6 months, depending on the length of your probationary period.
However, this is not true of all lenders. Speak with a bad credit car loan specialist for more information.
2.2 Evidence of employment required by most lenders
- 1 to 2 current payslips
- Confirmation of employment from your employer
- Check of probationary period status
- Confirmation of Centrelink payments received*
*Only for people applying for bad credit car loans on Centrelink payments.
3. Income from employment
When applying for a bad credit car loan, choose a car that matches the income from your new job.
If you're on a low income, you should choose a car of lesser value. If you're on a medium income, you may have more options. You can get an estimate of your borrowing power with our borrowing power calculator.
If you've tried applying for a loan when unemployed, you'll understand that finding car loans for unemployed people can be very difficult. Finding a suitable car loan while employed on a low wage and with a poor credit history can be difficult too. However, it may be possible.
As stated above, when applying, make sure you include all income. Bad credit car loans on Centrelink payments are possible and income from work, even a low income, can enhance your chances of approval.
As a rule car loans for unemployed people (with no income) are not possible in Australia. Bad credit car loans on Centrelink, however, may be an option for those receiving government payments.
Full details: Are car loans for unemployed people possible?
4. Type of employment
In Australia there three types of employment.
- Full time work
- Part time work
- Casual employment
You may also be self-employed or working on a contract to contract basis.
Full time and part time jobs are often considered the most stable as they generally feature consistent hours and salaries, whereas casual employment can differ depending on rostered hours.
It's worth noting that lenders will assess all income. Therefore, bad credit car loans on Centrelink payments alone are possible in some cases, however, it definitely helps if you have a working income to supplement those payments. Car loans for unemployed people without Centrelink payments are generally not possible.
"Employment history can be a strong indicator of how much risk is involved in a car loan application."
Bad credit car loans for new workers
At Rapid Finance, we've been helping our customers to find finance for more than 15 years. And, we could help you too, even if you've only recently entered the workforce.
Our bad credit car loan specialists focus on your financial strengths to seek out a car finance solution that is suitable for you and your circumstances.