Applying for a car loan can be daunting, especially for those who have never applied for personal finance before. But it’s not as hard as it looks. As long as you have all the car loan requirements, your application can go smoothly.  

Here’s a quick overview of the car loan requirements in Australia: 

Meet the eligibility criteria for loans 

Before starting the car loan process, you must ensure you’re eligible to apply for a car loan. Every lender has their own requirements when applying for certain car loans. In Australia, you need to meet the following criteria to be eligible for most loans: 

  • Be 18 years old or above 

  • An Australian resident or have permanent residency 

  • Currently employed or receive regular income 

  • Has no previous defaults on loans 

  • Not presently bankrupt  

  • Not under Deed Arrangement Part 9 or 10 

Additional requirements may be needed for those applying for unsecured car loans or bad credit car loans. Always check the eligibility criteria before submitting your application. You don’t want to go through the whole application process only to find out that you weren’t eligible for a loan in the first place. 

Provided the needed car loan requirements 

Once you know you’re eligible for a car loan, you need to submit the necessary documents. The documentation required varies depending on the lender. The basic information you need to provide include: 

  • Personal information and identification – Documents or identification that indicate your full name, age, date of birth, and citizenship information. Usually, lenders ask for a driver’s license, passport, or Medicare card. You may also be asked for a list of dependents and your employment status. 

  • Contact details – This includes your phone number, email address, residential address, and the like. 

  • Proof of income – Lenders need your most recent payslips and bank statements for the last three months. For self-employed borrowers, tax returns or BAS statements must be provided. 
    Usually, fixed payments like age pensions are considered regular income while temporary measures such as Youth Allowance payments are not. Some lenders may recognize Centrelink payments as a source of income while others do not, so it’s best to clarify with the lender before applying for a car loan. 

  • Proof of assets and liabilities – To better understand your financial situation, lenders will ask for details on any debt such as credit cards, personal loans, and mortgages. You may also be asked to provide documents on your investment portfolio, bonds, and other income-generating assets. 

  • Details of the car – When applying for a car loan, you will need to provide details of the car and how much it will cost. Additional information such as the dealer invoice or contract of sale, vehicle chassis number, vehicle registration information, and more. 

  • Car insurance information – You may also be required to submit proof of comprehensive car insurance before you get approved for a car loan. 

You may be asked to provide information about the car’s fuel efficiency as some lenders offer discounted rates for fuel-efficient vehicles. Always check with the lender or finance broker for the full list of documents required for a car loan to avoid delays. 

Having all the documents needed for a car loan ready before submitting your application will make the whole process easier. If you miss a document or two, your car loan application can stall for an indefinite amount of time until you provide them. 

Applying for a car loan is easy with Aussie Car Loans 

For a hassle-free car finance experience, get in touch with Aussie Car Loans. Call 1300 889 669 or schedule an appointment.  

We’ve helped countless car buyers find the perfect car finance option with great rates and incredible loan features. Start your car loan journey today by getting a quick quote online! 

FAQ

How do you finance a car in Australia? 

You can finance your car purchase with a car loan. Car loans are a type of personal loan used exclusively for buying vehicles. 

Am I eligible for a car loan? 

You could be eligible for a car loan if you’re at least 18 years old, are an Australian citizen or have permanent residency, are currently employed, and are in good financial standing. Additional requirements may be needed depending on the lender’s criteria. 

What documents do I need to apply for a car loan? 

Usually, you need to provide lenders with personal information, proof of income, proof of assets and liabilities, and complete information about the car you want to buy. 

Do I need a high credit score for a car loan? 

You don’t necessarily need a high credit score to get a car loan. However, having a high credit score gives you a better chance of approval. A high credit score can also help you get a loan with low rates and good features. 

What are the types of car loans? 

The main types of car loans are secured car loans and unsecured car loans. Secured car loans require borrowers to provide an asset as collateral in case they fail to make payments. These loans typically have better rates and features.  

Unsecured loans, on the other hand, don’t require borrowers to put up any asset as a guarantee. However, the interest rates are usually higher for this type of loan. 

How can I find the cheapest car loan? 

You can shop around for the cheapest loan or enlist the help of a finance broker like Aussie Car Loans. Because Aussie Car Loans has an extensive network of lenders and dealerships, they can help you find the best loans with the cheapest rates quickly and efficiently. 

Can I pay off my car loan early? 

It is possible to pay off your car loan early, but you may have to pay early termination fees and closing fees. 

What is a good interest rate on a car loan? 

Car loan interest rates can be anywhere from 5% to 12%, or even higher depending on the lender and type of loan. Your credit score and credit history can also affect your car loan interest rates.