Applying for a car loan might seem daunting, but the process can be quick and straightforward in the right hands. Whether you’re a high-income earner with perfect credit, have a few black marks on your file or are buying a vehicle for business, the journey is largely the same.
Before you start your application, it’s worth understanding the steps involved, from getting your quote to signing your final loan contract, so you know what to expect at each stage.
How to get a car loan with Savvy: the step-by-step process
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Fill out our simple online quote form
Start by telling us a bit about yourself, your finances and the car loan you’re after. One of our consultants will then call you to talk about next steps.
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Discuss your options with us
We'll search our lender panel to find the most competitive offers for your situation and walk you through what's available. This stage doesn't involve a hard credit check, so there's no impact on your credit score.
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Supply any required documents
We may request further documentation to verify details such as your employment and income. These can be submitted online via our portal.
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Complete your application
Your consultant can help you adjust and finalise the terms of your car loan. Once you're happy with the offer, you're ready to proceed.
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Find your ideal car
If you haven’t already chosen a car, our in-house car broker team, Vehicles Direct, can search our national network of dealerships to find the right vehicle at the best available price.
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Have your application submitted and approved
Your consultant will prepare and submit your application to your chosen lender. Approval can come through in as little as one business day.
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Sign on the dotted line
We’ll send through your final loan documents and other forms to read through and sign electronically. We'll then handle settlement. Once complete, you’re ready to hit the road!
How long does it take to get a car loan?
When you apply for a car loan with Savvy, we aim to turn around your application within 48 hours, though in many cases it can be even faster.
However, there are a range of factors that can impact how quickly your application is processed, including:
- The complexity of your application and financial profile, such as whether you have payday loans, defaults or debts
- The time of day or week you apply, as applications submitted late in the day, over the weekend or on public holidays may not be picked up until the next business day
- Whether there are any errors in your application
- Whether additional documentation is needed and how quickly you can provide it, such as proof of income, bank statements or vehicle details
What about pre-approval?
Pre-approval is a conditional agreement from a lender confirming how much they'd be willing to lend you, based on the information you've provided. It tells you how much you can borrow before you've found a car or committed to buy.
With Savvy, you can potentially receive pre-approval on the same day you apply. Pre-approvals are valid for up to 90 days, giving you the freedom to shop around for the right car and negotiate the best price without feeling rushed into a decision.
After you’ve found a car and are ready to buy, you’ll need to go through the standard application process, as outlined above.
How much can I borrow on my car loan?
In many cases, you can borrow the full purchase price of the car you’re looking to buy. Although lenders will set maximum lending limits, some will approve loans well into six figures, making it possible to finance even higher-end vehicles.
However, how much you're approved to borrow will depend on your individual financial profile. There’s a range of factors that impact your car loan borrowing power, from your income to your employment, credit score, assets and liabilities, and dependants. This means a borrower with a stable income, strong credit history and few financial commitments will typically be approved for more than someone in casual employment or who has a lower credit score.
Here’s an example of how much you may be capable of borrowing based on your income and number of dependants:
| Income | 0 dependants | 1 dependant | 2 dependants |
|---|---|---|---|
| $70,000 | $25,207 | $15,497 | N/A |
| $80,000 | $63,873 | $35,780 | N/A |
| $90,000 | $102,549 | $74,455 | $42,808 |
| $100,000 | $141,225 | $113,131 | $81,484 |
| $110,000 | $150,000 | $126,695 | $95,102 |
| $120,000 | $150,000 | $150,000 | $133,777 |
| Calculations are based on a single applicant purchasing a new car who is paying $2,400 per month in home loan or rent payments with no other loans or debt. All figures are for illustrative purposes only. Your borrowing power may be different based on factors specific to you. | |||
As you can see, your borrowing power increases dramatically the higher your income is and the fewer dependants you have.
Understanding car loan costs
Before committing to any loan, it's important to understand how costs work in practice. The table below shows how repayments on a $30,000 vehicle can vary depending on interest rate, loan term and deposit (fees not included):
| Scenario #1: low interest | Scenario #2: high interest | Scenario #3: shorter loan term | Scenario #4: longer loan term | Scenario #5: deposit | |
|---|---|---|---|---|---|
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Interest rate
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5.00% p.a.
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12.00% p.a.
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7.00% p.a.
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7.00% p.a.
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7.00% p.a.
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Loan term
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Four years
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Four years
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Two years
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Seven years
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Four years
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Deposit
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–
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–
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–
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–
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$8,000
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Monthly payment
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$691
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$790
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$1,343
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$453
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$527
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Total interest paid
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$3,162
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$7,921
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$2,236
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$8,034
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$3,287
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Of course, these are just example scenarios. For a more tailored estimate, our car loan repayment calculator can help you work out what different loan sizes, terms and rates would cost you overall.
The cost of owning a car doesn't end at the purchase price. It's also important to budget for ongoing expenses such as registration, stamp duty, insurance, servicing, maintenance and fuel, which can add significantly to the overall cost of ownership.
What to do before applying for a car loan
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Assess your finances
Check your credit score and look at any outstanding debts. If things aren't in great shape, tidying them up first can make a real difference to the rate you're offered.
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Work out your budget
Review your income and expenses to find a repayment you'd be comfortable with. Our car loan repayment calculator can show you what you might be able to borrow.
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Think about the car you want
Once you know your budget, consider what you want and need from a vehicle and use that to narrow down your options.
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Understand the loan you need
Not all car loans are the same. The loan you take out will depend on whether you're buying for personal or business use, while the car's age and your credit history may determine whether secured or unsecured borrowing is more appropriate.
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Shop around
Compare your options across multiple lenders before committing, though it's important to avoid submitting multiple applications, as each one can affect your credit score. A broker can do this legwork for you, searching the market on your behalf and matching you with the right lender.
Do I need to pay a deposit on my car loan?
No, a deposit is optional when taking out a car loan. In most cases you can finance the full purchase price of the vehicle, meaning you can borrow up to 100% LVR (loan-to-value ratio) and have nothing to pay upfront.
However, choosing to put down a deposit can boost your chances of approval. It also reduces the amount you need to borrow, which lowers your monthly repayments and the total interest you pay over the life of the loan.
A deposit can also be necessary if you want to buy a car priced above your approved borrowing limit. Putting down a deposit to cover the difference is one way to buy it without needing a larger loan approval or having to choose a different, cheaper vehicle.
Documents you need for a car loan application
Applying for a car loan doesn't require mountains of paperwork. Here's what you'll typically need:
- Driver's licence: or another form of government-issued ID, such as a passport
- Payslips: your two most recent consecutive payslips, or your last tax return if you're self-employed
- Savvy forms: your completed application, consent form and credit guide, supplied by your consultant
- Car details: basic information about the vehicle you're looking to purchase, such as its age and make
- Bank statements: 90 days of statements may be requested depending on your circumstances
