A Part IX debt agreement is a formal arrangement to repay part of what you owe and avoid bankruptcy. While mainstream lenders are unlikely to approve car loan applications during or shortly after a Part IX, there are still options available for financing a vehicle.
Can I get a car loan with a Part IX debt agreement?
While it’s more difficult to get approved for car finance if you’re still under a Part IX debt agreement, it isn’t impossible. Most mainstream lenders view a Part IX as a higher lending risk and are less likely to provide finance. However, there are some specialist lenders that will consider your application. Generally, your best chance to be approved for a car while under a Part IX debt agreement is to show:
- Good banking conduct such as no dishonours, overdrafts or missed payments for at least six months
- Regular, stable employment and a consistent income
- A solid rental or residential history
You’ll also need to provide detailed documentation showing your improved position, such as payslips, tax returns, bank statements and proof of residence.
While you may not qualify for mainstream finance straight away, you could still be eligible for a bad credit car loan through a specialist lender. These loans often come with higher interest rates, but they offer a way to buy a car as you start to rebuild your credit.
How much can I borrow for a car loan with a Part IX debt agreement?
When you apply for a loan, lenders will look at your income, expenses, employment stability and overall financial situation to decide how much you can borrow.
If you’re still under a Part IX debt agreement, your borrowing capacity will be very limited. However, once your agreement has ended and you’ve demonstrated consistent financial stability, your borrowing options should start to improve.
For Savvy customers with a current or discharged Part IX debt agreement, the average amount financed through us is around $25,817 – compared to an average car loan of around $36,000 across all Savvy borrowers.
While borrowing limits may be lower than for mainstream applicants, making repayments on time and showing responsible money management helps rebuild your credit profile, which in turn can increase the amount you’re able to borrow.
Top tips for getting car loan approval with a Part IX debt agreement
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Wait until your agreement is completed
Once your Part IX debt agreement has ended and you’ve shown steady financial management, your chances of approval will improve.
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Work on your credit score
Consistently paying bills, clearing small debts and avoiding defaults can help improve your credit profile.
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Choose a cheaper car
If you’re coming out of a Part IX debt agreement, applying for a smaller loan increases your chances of approval.
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Use a broker
Using a specialist broker like Savvy can help you find lenders willing to work with customers with Part IX agreements.
