Can You Get Car Finance After Using Payday Loans?

Short answer: A history of payday loans doesn't automatically rule you out, but it matters. Lenders see these loans on your credit file and in your bank statements, and many read recent or repeated use as a sign of tight cash flow. Having them fully repaid and a few months of statements without them usually improves your options.

What counts as a payday loan

In Australia, payday loans are formally called small amount credit contracts (SACCs). They're loans of up to $2,000 with a term of 16 days to 12 months. Fees are capped by law, but they're still an expensive way to borrow. Moneysmart has a clear explanation of how they work on moneysmart.gov.au.

How lenders see them

  • On your credit file. Each application usually creates an enquiry, which stays for 5 years. Your repayment history on the loan may also appear.
  • In your bank statements. Car lenders commonly review around 3 months of statements. Payday loan deposits and repayments stand out.
  • As a pattern. A single loan repaid on time a while ago is viewed very differently from several overlapping loans in recent months.
Your situation How lenders may view it
One or two old SACCs, repaid on time Often a minor issue
Repaid, but used in the last few months Some lenders may decline or ask for an explanation
Several current SACCs Many lenders will decline until they're cleared
SACCs with missed payments or a default Harder. Usually needs specialist lenders and time.

Steps before you apply

  1. Pay off any current SACCs and avoid taking new ones.
  2. Build clean bank statements. Aim for several months showing income, bills and rent without short-term loans or dishonoured payments.
  3. Get your credit report from the credit reporting bodies (it's free) and check everything is accurate.
  4. Write down the story. If a one-off event like a car repair or reduced shifts led to the loans, a brief explanation can help.
  5. Keep the car loan modest so the repayment clearly fits your budget.

If money is tight right now

If you're relying on payday loans to cover everyday costs, talk to a free financial counsellor through the National Debt Helpline on 1800 007 007 before taking on a car loan. For essential car costs, eligible people on lower incomes may be able to get a No Interest Loan (NILS) through Good Shepherd. Taking on a car loan you can't comfortably afford usually makes things harder.

Used payday loans in the past? Tell us about your situation in about 60 seconds and a licensed broker will call you. No credit check to enquire.

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Related guides

General information only. This isn't financial advice. Finance the Ride is a referral service and doesn't hold an Australian Credit Licence. Last reviewed September 2026.

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All Your Questions Answered

What is a car loan and how does it work?

A car loan is a finance product where a lender provides funds for you to purchase a vehicle, which you repay over time with interest.

What’s the difference between secured and unsecured car loans?

Secured loans use the car as collateral, often leading to lower interest rates. Unsecured loans don’t, but usually have higher rates.

What loan terms are available for car finance?

Most car loans offer terms from 3 to 7 years. Find out what term suits you best.

How is interest calculated on a car loan?

Interest is based on the loan amount, term, and rate. Fixed-rate loans have predictable repayments, while variable rates can change.

Can I get a car loan for a private sale?

Yes, many lenders accept private sellers. You’ll need to provide extra documents.

Do government employees get lower interest rates on car loans?

Yes — many lenders offer better rates due to your stable income. Explore finance options for government employees.

Can I apply for a car loan while on probation?

Yes. Many workers are approved during probation.

What credit score do I need as a government employee?

A score of 650+ is ideal, but lower scores may still be considered.

Are corporate professionals eligible for low-rate finance?

Yes, especially if you're full-time with strong income.

Can I get car finance with a novated lease?

Yes, many government departments support novated leasing.

Can I get a car loan with no credit history?

Yes, it's still possible to get a car loan with no credit history.

What if I’ve been declined elsewhere?

A broker can help restructure your application for better results.

How do I check my credit score?

Use Equifax, Experian, or Illion for a free check.

Can I get finance if I have a current personal loan?

Yes, if your income supports both loans. A broker will assess your capacity.

What documents do I need to apply?

Typically: ID, payslips, and bank statements.

Can casual workers get car loans?

Yes, if you’ve worked consistently for 6+ months.

Can I apply if I’m self-employed with an ABN?

Yes. Consider a low-doc loan.

Can Centrelink be used as income?

Yes, when paired with PAYG income.

What’s the minimum income to qualify for car finance?

Most lenders prefer $30,000+ annually, but this varies.

Can I apply on a fixed-term contract?

Yes, especially if it’s government-backed.

Can I finance a used car?

Yes, most lenders allow used cars under 10 years old.

Can I get a loan for an SUV or family car?

Absolutely

Can I finance a caravan or motorbike?

Yes

Can I finance an EV or hybrid car?

Yes. You may even qualify for green car loan discounts.

Can I use my car for both work and personal use?

Yes you can.

What is a balloon payment?

It’s a lump sum due at the end of the loan term.

Can I make extra repayments?

Yes, many lenders allow this without penalty.

Can I pay off the loan early?

Yes — ask if there’s an early payout fee.

Is there a deposit required?

Not always.

What loan terms are available?

1 to 7 years is standard.

How long does approval take?

24–48 hours in most cases

Can I apply online?

Yes — most lenders and brokers accept online applications.

Is a broker better than going direct?

Often, yes. They can compare lenders for you.

Can I get pre-approved?

Yes — and it gives you better negotiating power at the dealership.

What happens after I apply?

Your documents are reviewed, and if approved, the lender issues funds to the seller.

Can I get a loan with a visa?

Yes, in some cases. see finance for visa holders here.

Do I need a driver’s licence to apply?

Yes, but learners may qualify with a co-applicant.

Can I apply with someone else?

Yes, joint applications are allowed.

Can I refinance my current car loan?

Yes — it can lower your repayments or get you a better rate.

Can I trade in my old car as a deposit?

Yes, many lenders accept trade-ins toward the deposit.

Can nurses get car finance?

Yes — see nurse-specific finance tips.

Can teachers apply while on contract?

Yes. Read how to get approved.

Do defence personnel get special car loan rates?

Yes, in some cases. Your job security is a major advantage.

Can FIFO government workers apply?

Yes — consistency in income matters more than job location.

Can I apply if I’m on maternity leave?

Yes, especially if you’re returning to work. Here’s how.

Can I use car finance to buy interstate?

Yes — just make sure the seller provides all required documents.

Can I finance a car from an auction?

Yes, but only through select lenders. Ask your broker first.

Will applying hurt my credit score?

Only if you apply to multiple lenders directly. Brokers help protect your score.

Can I get a car loan if I’ve been bankrupt before?

Yes — see bad credit car loan options.

What if I want to upgrade my car before the loan ends?

You can sell the car, pay off the loan early, or refinance.