Car Finance While Renting With a Recent Default or Late Payment

😓 Renting and Worried About Your Credit?

If you’ve had a:

  • Telco default

  • Missed Afterpay or Zip payment

  • Late personal loan repayment
    ...and you’re now renting and needing a car, it’s natural to assume your chances are low.

But don’t panic. You can still get approved for car finance in Australia — even with a recent credit default.

✅ How Bad Credit Impacts Your Car Loan

Lenders will look at:

  • How recent the default or late payment was

  • What type of account it was on (utilities vs loan vs credit card)

  • Whether it’s paid or unpaid

  • Your rental stability and income reliability

  • If you’ve recovered financially since the missed payment

👉 Check your eligibility here — even with bad credit

💡 Tips for Renters With Defaults

  1. Be upfront — don’t try to hide your credit file

  2. Pay off any small unpaid defaults before applying

  3. Apply through lenders that accept bad credit or second-chance finance

  4. Keep your loan size realistic — lenders are more forgiving on smaller loans

  5. Avoid applying with multiple lenders — this lowers your credit score further

🏠 Renting Helps More Than You Think

Renters often have fewer liabilities than homeowners, which works in your favour.
If you’ve been:

  • Renting long-term

  • Paying on time

  • Keeping your bank account clean

… you may qualify — especially through brokers who deal with non-bank lenders.

👉 Bad Credit Car Finance Options

👨🔧 On ABN Income?

Some bad credit applicants working for themselves may do better with a low doc business car loan, particularly if their credit issue is more than 12 months old.

Useful:
👉 Is GST Registration Required for ABN Car Finance?

🔄 Changed Jobs Since Your Default?

Not a problem — as long as your income is now steady.
👉 Car Loans After Job or Address Changes

🚀 Final Word

A recent default or late payment doesn’t mean you’re locked out of car finance forever.
If you’re renting, earning, and upfront about your situation, you can still drive away — with the right lender.

👉 Apply now with no hit to your credit score

 

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.