Can You Get Car Finance While Repaying Student Loans?
Yes, having student debt doesn’t mean you can’t get car finance—but it does affect how lenders assess your application. Whether you have a HECS-HELP loan or a private student loan, lenders will consider your:
- Debt-to-income ratio (DTI) – How much of your income goes towards existing debts
- Credit score – If you have a private student loan, it may appear on your credit report
- Repayment history – Late or missed payments on private student loans can reduce approval chances
- Loan affordability – The higher your student debt, the lower your borrowing power for a car loan
However, with the right approach, you can still secure car finance while managing student loan repayments.
🔍 How Lenders Assess Car Loan Applications with Student Debt
| Factor | Why It Affects Approval | How to Improve Chances |
|---|---|---|
| 💰 Debt-to-Income Ratio (DTI) | If your student loan takes up a large portion of your income, lenders may limit your car loan amount. | Reduce other debts before applying for car finance. |
| 📉 Credit Score | Private student loans appear on credit reports and affect your score. | Ensure on-time payments and check for errors on your credit report. |
| 🚗 HECS-HELP Repayments | Automatically deducted from your salary once you earn above the repayment threshold. | Provide proof of stable employment and income to reassure lenders. |
| 🏦 Loan Affordability | Student loans reduce disposable income, affecting how much you can borrow. | Apply for a smaller loan or save for a larger deposit. |
✅ Best Strategies for Getting Car Finance While Managing Student Debt
If you’re repaying HECS-HELP or a private student loan, follow these tips to increase your car loan approval chances:
1️⃣ Lower Your Debt-to-Income Ratio (DTI) – If possible, pay off smaller debts (like credit cards or personal loans) to improve your DTI.
2️⃣ Check & Improve Your Credit Score – If you have a private student loan, ensure your credit report is free from missed payments or errors.
3️⃣ Apply for a Smaller Loan or Increase Your Deposit – A lower loan amount is easier to get approved for, especially with student debt.
4️⃣ Show Proof of Stable Income – Lenders prefer applicants with full-time jobs and regular income to ensure loan repayments can be managed alongside student debt.
5️⃣ Choose the Right Loan Term – A longer loan term means lower monthly repayments, making it easier to balance student loan obligations.
6️⃣ Consider a Guarantor Loan – If your borrowing power is low due to student debt, applying with a guarantor who has good credit can improve your approval chances.
7️⃣ Use a Finance Broker – A broker can find lenders who are flexible with student debt borrowers and help you get better loan terms.
🚨 What If Your Car Loan Is Rejected Due to Student Debt?
If your car finance application is declined because of student loans, consider these options:
✅ Wait & Reduce Your Debt – Paying off part of your student loan or other debts can improve your borrowing capacity.
✅ Look for a Specialist Lender – Some lenders offer car loans designed for students and recent graduates.
✅ Opt for a More Affordable Car – A smaller loan means less risk for lenders, increasing your approval chances.
✅ Find a Guarantor – A co-signer with strong credit can improve your application strength.
✅ Consult a Finance Broker – A broker can help you find a lender that considers student loan repayments more flexibly.
🚀 How a Finance Broker Can Help If You Have Student Loan Debt
A finance broker can assist with securing car finance despite student loan obligations by:
✅ Finding Lenders That Accept Student Debt Borrowers – Some lenders are more lenient with HECS-HELP or private student loans.
✅ Helping You Structure Your Loan for Higher Approval Chances – Brokers guide you on loan size, term, and deposit strategy.
✅ Negotiating Better Loan Terms – Brokers can secure lower interest rates and repayment flexibility for student loan holders.
🔑 Final Thoughts
Having student loan debt doesn’t mean you can’t get car finance—but it does affect your borrowing power. By lowering other debts, improving your credit score, and working with a finance broker, you can increase your chances of securing a car loan that fits your budget.
🚗 Need car finance while managing student loans? Take the right steps today to get approved!
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.
