💰 Does Being in a Debt Agreement Affect Car Loan Approval?
Yes! A debt agreement (Part IX under the Bankruptcy Act) is a formal debt solution that affects your credit rating and car loan approval chances.
Lenders assess:
✅ Whether the debt agreement is active or completed
✅ Your ability to afford new repayments
✅ Your credit score and financial history
If you’re still in a debt agreement, most mainstream lenders will not approve a car loan, but some specialist lenders may offer options.
🔍 How Lenders View Debt Agreements for Car Loans
Your approval chances depend on whether the debt agreement is active or completed.
| Debt Agreement Status | Approval Chances | Lender’s View |
|---|---|---|
| ✅ Completed (2+ Years Ago) | High | Some lenders will approve, but rates may be higher. |
| ⚠️ Recently Completed (<2 Years) | Moderate | A few lenders may approve with strict conditions. |
| ❌ Currently Active | Very Low | Most lenders will not approve until it’s settled. |
If your debt agreement is completed, waiting at least 2 years can improve your car loan approval chances.
✅ How to Get a Car Loan If You’re on a Debt Agreement
If you’re in or have recently completed a debt agreement, follow these steps to improve your chances:
1️⃣ Wait Until Your Debt Agreement is Completed – Most lenders won’t approve a loan while the agreement is active.
2️⃣ Check Your Credit Report – Ensure your debt agreement is recorded as completed.
3️⃣ Improve Your Credit Score – Build a positive payment history for at least 6-12 months.
4️⃣ Save for a Deposit – A deposit reduces lender risk and increases approval chances.
5️⃣ Use a Finance Broker – A broker can find lenders that approve applicants with past debt agreements.
If your debt agreement was recently completed, some lenders will still approve a car loan with higher interest rates.
🚨 Can You Get a Car Loan If You’re Still in a Debt Agreement?
It’s very difficult, but some lenders may consider your application if:
✅ You have written approval from your debt administrator.
✅ You can show strong income and stable finances.
✅ You apply for a secured loan (car as collateral).
A finance broker can help find lenders that approve applicants with past debt agreements.
🚀 Why a Finance Broker Can Help If You Have a Debt Agreement
If your car loan application was rejected due to a debt agreement, a finance broker can help by:
✅ Finding lenders that approve borrowers despite past financial difficulties.
✅ Matching you with a loan that fits your situation.
✅ Helping you avoid unnecessary credit checks that lower your score further.
If you’re in or have completed a debt agreement but need a car, don’t risk rejection! 🚗💨 A finance broker can help you secure finance with the right lender.
If you have a debt agreement but need a car loan, you still have options! A finance broker can match you with lenders who approve finance despite past financial issues.
DISCLAIMER
The information provided on this website is general in nature only and has been prepared without considering your financial needs, circumstances and objectives and should NOT be construed as financial, taxation or legal advice. For more information, get in touch with our experienced partner brokers today.
