How Missed Payments on Personal Loans Affect Car Loan Approval

Can You Get Car Finance After Missing Payments on a Personal Loan?

Yes, but missed payments can significantly impact your car loan approval chances. Lenders view late payments as a sign of financial risk, which can lead to:

✔️ Higher interest rates – Lenders may charge higher rates to offset risk
✔️ Stricter approval conditions – You may need a larger deposit or a co-signer
✔️ Limited loan amounts – Some lenders may reduce your borrowing power
✔️ Application rejections – If recent missed payments are severe, some lenders may decline your application

Even with missed personal loan payments, you can still qualify for car finance by taking steps to strengthen your application.

🔍 How Lenders Assess Car Loan Applicants with Missed Loan Payments

Factor Why It Matters How to Improve Chances
📉 Credit Score Missed payments lower credit ratings. Rebuild credit by making on-time payments going forward.
💰 Income Stability A steady job reassures lenders. Provide bank statements and pay slips as proof of stable income.
📆 Recency of Missed Payments Recent late payments impact approval more. Wait at least 6 months and demonstrate improved financial management.
💵 Deposit Amount A higher deposit reduces lender risk. Save 10–20% of the car’s value to improve approval chances.

✅ How to Improve Car Loan Approval Chances After Missing Loan Payments

If you have missed payments and need car finance, follow these steps to increase your approval chances:

1️⃣ Check Your Credit Report for Errors – Ensure your missed payments are correctly reported and dispute any errors.

2️⃣ Demonstrate Improved Financial Habits – Show consistent, on-time payments for at least 3–6 months before applying.

3️⃣ Save for a Larger Deposit – A higher deposit reduces the amount borrowed and improves approval odds.

4️⃣ Apply for a Lower Loan Amount – A smaller car loan is easier to get approved for.

5️⃣ Consider a Secured Loan – A secured car loan (where the car is used as collateral) can improve approval chances.

6️⃣ Use a Guarantor or Co-Signer – Someone with good credit can strengthen your application.

7️⃣ Find a Specialist Lender – Some lenders focus on car loans for applicants with past missed payments.

8️⃣ Work with a Finance Broker – Brokers help find lenders who approve car loans for applicants with financial setbacks.

🚨 What If Your Car Loan Application Is Declined Due to Missed Payments?

If lenders reject your application due to missed personal loan payments, try these solutions:

✅ Rebuild Your Credit First – Spend 3–6 months improving your credit score before reapplying.

✅ Find a Specialist Lender – Some lenders offer car loans for applicants with late payment histories.

✅ Use a Co-Signer – A co-signer with a strong credit profile can improve approval odds.

✅ Apply for a Secured Car Loan – A secured car loan (where the car is used as collateral) reduces lender risk.

✅ Consult a Finance Broker – A broker can match you with lenders who approve loans despite missed payments.

🚀 How a Finance Broker Can Help Applicants with Missed Loan Payments Get Car Finance

A finance broker can assist by:

✅ Finding Lenders That Accept Applicants with Missed Payments – Some lenders specialize in car finance for applicants with past late payments.

✅ Helping You Strengthen Your Loan Application – Brokers ensure your financial recovery is well presented.

✅ Negotiating Better Loan Terms – They help secure lower interest rates and affordable repayments.

🔑 Final Thoughts

Missed payments on a personal loan don’t mean you can’t get car finance, but lenders will assess your financial history carefully. By rebuilding your credit, securing stable income, and working with a finance broker, you can increase your chances of securing a car loan with the best possible terms.

🚗 Had missed payments and need a car loan? Get expert help today to find the best finance options for your situation!

 

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.

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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.