Written by Being a casual worker doesn’t automatically mean you can’t get a car loan. After all, around one in five Australians consider their employment to be casual, according to the Australian Bureau of Statistics. The reality is that there are more lenders than you’d think that are willing to work with people in your boat. For casual workers, though, lenders will focus on your income and job stability when assessing your application.
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How can I get a car loan as a casual worker?
There are a few key points you’ll need to meet to be approved for car finance as a casual worker. The main ones are:
- Income: you’ll need to hit your lender’s minimum income requirements. This can start from as little as $400 to $500 per week (around $20,000 to $26,000 annually).
- Income stability: lenders want to see consistency in your payslips. Working consistent hours and receiving stable income will go a long way towards helping you get approved.
- Time in employment: you’ll need to show that you’ve been working in the same place for at least three to six months in most cases. A brand-new casual gig won’t cut it.
- Other standard eligibility criteria: aside from these casual-specific points, you’ll have to meet all the other regular criteria, such as age, residency, credit history and more.
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How much will I be able to borrow on a casual income?
Each lender assesses borrowing power differently, but they’ll look at the following factors when determining how much they’re willing to lend you:
- Your income and expenses: the more left over after expenses are deducted, the more you’ll be able to pay towards a car loan.
- Your credit score: a strong credit score suggests reliability when it comes to staying on top of your debts, which lenders like to see.
- Your history repaying similar loans: if you’ve paid off a similar loan in the past few years, lenders are more likely to trust you with a larger sum.
- The value of your car: the amount you can borrow will be tied to your car’s cost, too. Although you may be able to include certain on-road costs, you won’t be able to borrow much more than its value.
- Your assets and liabilities: you’re likely to be seen as more reliable with assets like cars and property behind you, but liabilities such as other loans will eat into your borrowing power.
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Top tips for maximising your chances of car loan approval on a casual income
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Work for a while before you apply
Make sure you’ve built up a record of consistent work and pay at the same place before you hit send on that application.
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Pay a deposit if possible
If you have savings to spare, paying a deposit towards the purchase of your car can help you get approved and save money overall (though we work with lenders who can finance up to 100% of your car's purchase price.
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Improve your credit score
Even if your score isn’t that bad, continuing to pay your bills on time and reducing credit limits where possible can boost it.
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Apply with a partner or guarantor
Having an extra income on your application can increase your approval chances, as can applying with a parent or grandparent as a guarantor.
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Cut out unnecessary expenses
Assess your monthly incomings and outgoings to see where you might be able to save money. Every little bit counts on your application.
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Frequently asked car loan questions by casual workers
There are several options you can look into if you end up finding permanent employment during your loan term. Here’s what you can do:
- Continue to pay off your loan as normal
- Pay off the loan ahead of schedule (provided your lender doesn’t charge early repayment fees)
- Refinance your car loan to access a better interest rate, which is likely to be available with greater job stability
Lenders will consider factors like overtime and penalty rates when assessing your application. However, they’ll view these as part of an average over time, noting that they don’t occur regularly.
You’ll need to be able to demonstrate a consistent period of income inclusive of these other payment types if they’re to be counted in your regular income. For example, your penalty rates can be included if you demonstrate that you work every Sunday at your place of employment.
Yes – unsecured loans are available as an option if your car doesn’t meet your lender’s eligibility requirements. These come with higher interest rates and cap your spending at $50,000 to $75,000. However, they’re quicker and easier to be approved for, with some settlements available within 24 hours, and sidestep the age limits lenders place on secured car loans.
Provided you still satisfy all your lender’s criteria, you can be approved while receiving Centrelink payments. Some of the payments that may be accepted as part of your application can include:
- Age Pension
- Carer Payment
- Disability Support Pension
- Family Tax Benefits A and B
- JobSeeker Payment (in conjunction with wage income or family allowance payments only)
- Parenting Payment
- Service Pension for Veterans
- Special Rate (Totally and Permanently Incapacitated) Pension
