Can I get a car loan if I am on a pension?
Will I be approved?
- Income received from pension payments and other government benefits
- Credit history
- Assets, including your home and savings
- Residency status – you will need to be an Australian citizen or permanent resident
Play the odds
- Make sure your income is high enough to easily meet the repayments for the loan you want.
- Save for a deposit or look at buying a used car so you can borrow a smaller amount.
- Make sure there’s no history of late payments on your bills (the occasional lapse is OK).
- Use an asset as collateral. Using an asset as security against the loan, reduces the risk to the lender as they can use the asset to recover the cost of the loan if you are unable to make repayments down the track. It may also mean you can secure a lower interest rate on your car loan.
- Have a family member or friend with good financial status and credit history act as a guarantor on your car loan. This means they co-sign the loan and agree to accept responsibility for the repayments if you default for any reason. Your guarantor acts as a type of security, making it less risky for your lender to loan you the funds.
- The loan amount
- The interest rate
- The repayment period