Can I get a secured car loan as a pensioner, if I’m on Centrelink payments, or other kinds of benefits?
The short answer is yes! But only certain kinds of loans are able to be accepted. Some lenders will only lend to certain pension or Centrelink payments recipients due to preference or legislation. Please check the list below for types of Centrelink payments or pensions that are not accepted.
– Carers Payments
– Total and Permanent Incapacitated Pension
– Disability Support Pension
– Single Parent Payments
– Aged Pension
– Veterans Affairs Pension
– Partnered Parent Payment
Are there any risks involved with getting a secured car loan?
As with any loan there are things you need to be aware of but there are no unusual risks involved.
The main thing you need to be understand is that a secured car loan uses the car as security on the loan. This means that if you are unable to make your loan repayments during the loan term the lender has the option to repossess the car. They will then sell the car to recover any outstanding costs.
While losing your shiny new car is a negative you also face the risk of lowering your credit score, possibly to what is considered a bad credit score, after defaulting on your repayments.
Any damage to your credit score should be avoided because it will make it more difficult for you to secure finance in future. This includes small things like credit cards but also extends to more important things such as home loans.
The good news is that this can easily be avoided by making your repayments on time and reliably.
If you want to read more about credit score check out our blog post – You Can Raise Your Credit Score – Now!
How do I afford to get a car loan?
There’s no hidden secrets to making car finance work for you. The number one thing is of course managing your budget.
Comparing your income to your costs and setting aside that money can be the difference between knowing that you can comfortably afford your car over the life of the loan or in the worst case being unable to make your repayments.
Be mindful that all loans usually involve some kind of extra costs, such as interest, account management fees, late payment fees, or early payout/termination fees. These extra costs are added to the borrowed amount. Be sure to read and understand all the terms and conditions of the loan before you accept the loan offer so you know what your obligations are.
How to get the best value out of your loan –
So it is important to get the best value out of every factor in the situation to make your money go further.
You want to be sure you’re choosing the best loan option available to you. Depending on your financial situation this will not necessarily mean a low or a high interest rate. It should be the one that is the best pick for you out of the available options.
Knowing how much you can afford directly relates to how much you can safely borrow, which brings us to the fun part – the amount you have to spend on your car purchase.
The next step is matching your purchase price with your borrowed amount. Choosing a car that is within your budget is of course the first step. Being careful not to over-spend or add any of your own money on top is usually a good idea, too.
The aim is to find the balance between getting your car and financial security.
Is it easier to get a loan for certain types of car?
Not really! Lenders are mostly concerned with your ability to repay the loan. When you apply for a loan your finances will be assessed.
This includes comparing your income to your expenses, which can include everything such as utilities bills, food, general expenditure, school fees, and other debts. Your credit score will also be taken into consideration. Then your loan application will be compared to their lending criteria. Each lender has their own lending criteria that often relate to the kind of loans they choose to work with, though they are generally along the same lines.
While this does sound like a big deal it is very normal – there are lenders who work with all kinds of loan applications, good and bad credit, large and small amounts, all types of vehicles, and the list goes on.
At Hoolu we work with almost 40 different lenders and have great working relationships with all. This means we know what they do and don’t like, which means we can submit your application to the most suitable lender every time.
While this may sound like the obviously best thing to do, many people neglect the importance of selecting the right lender to submit their loan to.
Many people focus simply on getting approved but they forget that each time they apply for any type of credit their credit file is checked. These applications can then be seen by other lenders whenever you apply for another loan.
This can potentially be reason to deny you a loan as it might appear that you are always relying on credit to make ends meet, can’t manage your finance, or have been declined on other occasions.
When Hoolu checks your credit file before submitting your application we do a ‘soft touch’ check which leaves no marks on your credit file. You can trust us to handle your application in the correct way that boosts your chances of success as much as possible.
Our specialty is of course making 24 hour car loans happen. But we can also help you with business loans, or if you’re a trade customer looking for an equipment loan you can visit us at Equiplend Australia.