Can You Get a Car Loan If You’ve Recently Closed a Credit Card?

💳 Does Closing a Credit Card Affect Car Loan Approval?

Yes! While closing a credit card might seem like a good financial move, it can temporarily lower your credit score, which may affect your car loan application.

Lenders assess:

✅ Your credit score after the account closure
✅ Changes in your credit utilization ratio
✅ Your overall credit history and financial stability

If you’ve recently closed a credit card, it’s still possible to get a car loan if other factors are strong.

🔍 How Lenders View Credit Card Closures for Car Loan Approval

Lenders analyze how a closed credit account impacts your financial profile.

Factor Why It Affects Approval How to Improve Chances
📉 Credit Score Impact Closing an account may temporarily lower your score. Wait 3-6 months for your score to recover before applying.
💳 Credit Utilization Ratio Closing a card reduces your total available credit, increasing your utilization ratio. Pay off existing balances before applying for a car loan.
📊 Credit History Length Older accounts help build your credit history. Keep at least one long-term credit account open.
🏩 Recent Financial Changes Lenders may see account closures as financial instability. Maintain a stable income and strong credit profile.
🚗 Other Open Credit Accounts Fewer accounts can limit borrowing power. Keep at least one active credit account.

If you recently closed a credit card, waiting a few months before applying for a car loan can improve approval chances.

✅ How to Get a Car Loan After Closing a Credit Card

If you’ve just closed a credit account, follow these steps before applying for a car loan:

1ïžâƒŁ Check Your Credit Score – Ensure the card closure didn’t significantly lower your score.
2ïžâƒŁ Reduce Existing Debt – Keep your credit utilization ratio below 30%.
3ïžâƒŁ Wait for Your Score to Recover – Allow 3-6 months before applying for a new loan.
4ïžâƒŁ Maintain Strong Financial Stability – Ensure steady income and employment.
5ïžâƒŁ Use a Finance Broker – A broker can find lenders that approve applicants with recent credit changes.

Even if your credit card was recently closed, some lenders may still approve your car loan with adjusted terms.

🚹 What If Your Car Loan Is Declined Due to a Credit Card Closure?

If lenders reject your application, consider:

✅ Waiting a few months for your credit score to stabilize.
✅ Applying with a guarantor to strengthen your application.
✅ Choosing a secured car loan to lower lender risk.

A finance broker can help find lenders that approve applicants despite recent credit account closures.

🚀 Why a Finance Broker Can Help If You’ve Closed a Credit Card

If your car loan was declined due to a recent credit card closure, a finance broker can help by:

✅ Finding lenders that accept applicants with recent credit changes.
✅ Matching you with a loan that fits your financial situation.
✅ Helping you avoid unnecessary credit checks that lower your score.

If you recently closed a credit card but need a car, don’t risk rejection! 🚗💹 A finance broker can help you secure finance with the right lender.

If you just closed a credit card and need a car loan, you still have options! A finance broker can match you with lenders who approve finance despite recent credit account closures.

 

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.