What to Do If You’ve Had Missed Payments on a Personal Loan and Want Car Finance

❓ Can You Get Car Finance After Missing Personal Loan Payments?

Yes, but it will be more difficult. Lenders look at your repayment history to determine how well you manage debt. If you’ve missed payments, lenders may see you as a higher risk, which can lead to:

✔️ Higher interest rates – You may be charged higher rates to offset lender risk
✔️ Stricter approval conditions – Some lenders may require a larger deposit or a co-signer
✔️ Limited loan amounts – You may only qualify for a smaller loan
✔️ Application rejections – If the missed payments were recent or severe, lenders may decline your application

However, you can still qualify for car finance if you take the right steps to strengthen your application.

🔍 What Lenders Look for When Assessing Car Loan Applicants with Missed Payments

Factor Why It Matters How to Improve Chances
💳 Credit Score Missed payments lower your score. Make on-time payments to rebuild credit.
💰 Income & Employment Stability A steady job reassures lenders. Provide bank statements and pay slips as proof of consistent earnings.
📆 Time Since Last Missed Payment Recent missed payments are a red flag. Wait 6–12 months before applying and show improved financial habits.
💵 Deposit Amount A higher deposit lowers lender risk. Save at least 10–20% of the car’s value to strengthen your application.

✅ Steps to Take Before Applying for Car Finance After Missed Payments

If you want a car loan but have a history of missed payments, follow these steps to increase your approval chances:

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

2️⃣ Make On-Time Payments for at Least 6 Months – Show lenders that you have improved your financial habits.

3️⃣ Lower Your Debt-to-Income Ratio – Pay off outstanding debts to improve your financial standing.

4️⃣ Save for a Larger Deposit – A bigger deposit reduces lender risk and can lead to better loan terms.

5️⃣ Apply for a Lower Loan Amount – A smaller loan is easier to get approved for.

6️⃣ Consider a Secured Loan – A secured car loan (where the car is used as collateral) may improve approval chances.

7️⃣ Use a Guarantor or Co-Signer – A co-signer with good credit can strengthen your application.

8️⃣ Work with a Finance Broker – Brokers help find lenders who specialize in car finance for applicants with past missed payments.

🚨 What If Your Car Loan Application Is Declined?

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

✅ Wait and Rebuild Your Credit – 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 financial profile can help secure approval.

✅ Apply for a Secured Car Loan – A secured loan reduces lender risk and increases approval chances.

✅ Consider Rent-to-Own Car Finance – Some dealerships offer flexible financing options for applicants with past financial difficulties.

✅ 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 clearly presented to lenders.

✅ 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.