Hey! Is this your first car loan?

Don't stress - most people under 25 have never had credit before. Before you scroll below to the article, I'll give you few pointers on the loan process, so that you know what lenders look out for, and how to increase your chances of approval.

First, lets talk about your "profile"

Your "profile" is basically where you stand in your chances at approval and what rates you are eligible for.

A first time lend is not the strongest profile, BUT...

There are some ways to increase your chances of approval if you know what lenders look for to approve your loan.

What lenders look for:

You are stable in your job (click to read more)

Lenders want to see you have been in your job for a minimum period of 6 months. They love it when you have been in your job for over 1 year.

How do lenders check how long you have been employed for:

Lenders can verify by one of these ways:

- They see your Year-to-date (YTD) Income is in-line with you having worked at that company since July 1 at the very least.

- They see your annual leave balance is high (magic number is typically 60 hours + showing on your payslip)

- They could call your employer to verify how long you have been in the role for.

What if...

You are casual?

Lenders will most likely call your employer to verify tenure, and confirm your line of work is ongoing for the foreseeable future. Note that if you are employed casual, you need to at minimum be working near full-time hours to qualify for your first car loan.

What if your employer changed their company ABN / payroll system?

Again, same rules apply as above, the lender will most likely call your employer to verify the ABN / payroll system change.

You have good "rateable" credit (click to read more)

"Rateable credit" means you can prove you have been an on-time payer on other loans.

If you have never taken out a loan before, move to the next pointer. If you do have a current loan, read on below.

How do you prove you are an on-time payer on your other loans?

The most common way the lenders verify you are an on-time payer is through your credit file that the lender has access to. If you have paid your loans on-time, your credit file will show this to the lender, and this substantially increases your chances of approval, how quickly you get approved, and what rates you qualify for.

You decide to place a deposit on your car (click to read more)

Showing the lender that you are willing to put some money up-front on your first car loan, instantly tells the lender that you:

  • Are financially responsible
  • Are wanting to put skin in the game
  • Already have some savings (a fallback position) in your finances in case your source of income gets affected.

Just like if you have rateable credit or have been in your job for over 12 months, lenders see this as a major positive in your application and will increase your odds and speed of your approval.

If you are thinking of placing a deposit, consider placing 10% - 20% to increase your approval chances.

You are realistic with your requested loan amount and car (click to read more)

The first thing a lender sees when they pick up your application is the car you want, and the loan amount.

You may have ticked every other box above, however if you pick a sports or exotic car for $80,000, the lender will instantly throw your loan into the bin.

This is your first loan, you need to demonstrate to the lender that you are realistic with the car you are wanting.

Try to keep your first loan amount under $30,000 and only choose a standard everyday car that can get you from A to B.

All that sounds brutal...

You are not alone thinking the application process is daunting, however you have come to the right place.

Ready to See Your Chances? We Can Check It for You...

Buying your first car is a huge milestone - and you don't need to figure it out alone. If you want to know how strong your profile looks (and what lenders would think of your application), we can check everything for you without affecting your credit score.

Whether you're working full-time, part-time, casual, doing an apprenticeship, or in your first proper job - there are lenders who want first-time buyers.

You just need someone who knows which lender is right for your situation.

Here's what happens when you apply:

A broker reviews your application the same day

If you apply on the weekend, you will receive a call first thing next business day.

We match you with a lender who suits first time borrowers

Your application would be sent to one of over 60 lenders for the best outcome.

You get personalised tips to strengthen your profile.

If it's best for you to wait a little bit longer to strengthen your profile, we'll tell you.

You stay in control the whole way

Whether you want to proceed with your car loan now or later, it will always be up to you.

How to Get Approved for Car Finance with No Credit

Securing car finance in Australia without any credit history can be challenging, but it's certainly possible. Whether you're a young individual just starting to build your financial profile, or someone who has never taken out a loan before, there are options available to help you secure the car you need. Lenders typically view a credit history as a sign of your financial responsibility, but even without one, it’s still possible to get approved for car finance. Here’s how you can improve your chances of approval.

1. Consider Specialist Lenders

Traditional banks and financial institutions often require a credit history to assess your ability to repay a loan. However, there are specialist lenders in Australia who focus on offering car loans to individuals with no credit history. These lenders understand that not everyone has a credit history, and they may be more willing to approve a loan based on other factors, such as your income and employment stability. They are often more flexible in their lending criteria, making them a good option for those looking for car finance without credit.

2. Provide Proof of Income

When you have no credit history, demonstrating your ability to make regular repayments becomes even more crucial. Lenders want to know that you can afford to repay the loan, so providing proof of income is essential. This can include pay slips, bank statements, or tax returns, depending on your employment status. If you're self-employed, showing your business income or tax documents can help. Lenders want to see that you have a reliable and consistent income, which will reassure them that you can handle a car loan.

3. Consider a Larger Deposit

One of the best ways to improve your chances of getting approved for car finance with no credit is by offering a larger deposit. A larger deposit reduces the amount you need to borrow, which lowers the lender’s risk. If you can put down a 20% or more deposit, you’ll demonstrate to the lender that you are financially responsible and committed to the purchase. A sizeable deposit also means smaller monthly repayments, which can improve your affordability in the eyes of the lender.

4. Explore Secured Car Loans

Secured car loans are an excellent option for individuals with no credit history. With a secured loan, the car you are purchasing acts as collateral for the loan. If you fail to meet your repayment obligations, the lender has the right to repossess the car. This reduces the lender's risk and makes it more likely that they will approve the loan. Secured loans are often easier to obtain than unsecured loans, even for those with no credit history, and they typically come with lower interest rates.

5. Find a Guarantor

If you have a family member or friend with a good credit history, they may be willing to act as a guarantor on your car loan. A guarantor agrees to take responsibility for the loan if you are unable to make the repayments. This adds security for the lender, which can increase your chances of loan approval. If your guarantor has a strong credit score, it may also help you secure better loan terms and a lower interest rate.

6. Show Stability in Your Financial Situation

Lenders are more likely to approve your loan if you can demonstrate stability in your financial situation. This includes having a steady job, a regular income, and a stable living arrangement. If you’ve been in your current job for an extended period, or if you’ve been living in the same place for a while, this can indicate to lenders that you are a reliable borrower. Stability helps build trust with the lender, even if you don’t have a credit history.

7. Start with a Co-Signer

If you're having trouble getting approved for a car loan on your own, consider applying with a co-signer. A co-signer is someone who agrees to take on the responsibility of the loan if you fail to make payments. Having a co-signer with a good credit history can greatly improve your chances of approval. It also reassures lenders that they have a backup plan if you’re unable to make payments, making them more likely to approve your loan.

8. Shop Around for Lenders

Not all lenders have the same criteria when it comes to approving car loans. Some may be more willing to work with borrowers who have no credit history, while others may have stricter requirements. It’s important to shop around and compare different lenders to find the one that best suits your situation. You can also consider working with a car loan broker who can help you find lenders who specialise in offering finance to individuals with no credit history.

Conclusion

Getting approved for car finance with no credit in Australia can be challenging, but it’s possible with the right approach. Consider applying with a specialist lender, offering a larger deposit, or exploring secured loans. Providing proof of income, finding a guarantor or co-signer, and showing stability in your financial situation will also improve your chances of securing a loan. By taking these steps and shopping around for the right lender, you can successfully navigate the process and secure the car finance you need.

 

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.