The 485 visa, also known as the Temporary Graduate Visa, is a popular option for international students who have recently completed their studies in Australia. Many 485 visa holders are keen to secure car finance to help with their daily commute or travel needs. But can you get car finance on a 485 visa in Australia? The short answer is yes, but there are certain considerations and factors that will influence your ability to secure a car loan.
Understanding the 485 Visa and Car Finance
The 485 visa allows international graduates to live, work, and study in Australia temporarily. There are two main streams under the 485 visa: the Graduate Work stream (for international students who have completed a qualification related to an occupation on Australia's Skilled Occupation List) and the Post-Study Work stream (for those who have completed a higher education qualification in Australia). While this visa provides flexibility for work and study, lenders may view 485 visa holders as higher-risk borrowers due to the temporary nature of their stay in Australia.
However, this doesn’t mean that getting car finance is impossible for 485 visa holders. Several lenders in Australia provide car loans to temporary residents, though they may have stricter lending criteria compared to loans for Australian citizens or permanent residents.
Key Factors Lenders Consider
- Visa Type and Duration: Lenders are more likely to approve car loans for applicants with longer stays in Australia. Since the 485 visa is a temporary visa, the lender may assess how long you plan to stay in Australia and whether you have the financial means to repay the loan during that time. The length of your visa may influence the loan terms and interest rates offered.
- Income and Employment: A stable and consistent income is a crucial factor for loan approval. Lenders will want to ensure that you can make regular repayments. If you’re employed full-time or part-time, providing recent pay slips, tax returns, or employment contracts will strengthen your application. As a 485 visa holder, having a stable job in your field of study can help demonstrate that you’re financially secure.
- Credit History: Having a good credit score plays a significant role in obtaining car finance. Lenders look at your credit history to assess how responsibly you manage debt. If you don’t have an Australian credit history, some lenders may consider your overseas credit report, but not all will. If you are new to Australia and have no credit score, it’s advisable to build a credit history by using a credit card or taking out a small loan before applying for car finance.
- Deposit Size: Offering a larger deposit can improve your chances of getting approved for car finance. A deposit of around 10-20% of the car’s value reduces the lender’s risk and may result in better loan terms. The larger the deposit, the less you need to borrow, which lowers the lender’s exposure.
Loan Types Available
- Secured Car Loans: A secured car loan requires you to use the car as collateral. This means the lender can repossess the vehicle if you fail to make repayments. Secured loans tend to have lower interest rates and are easier for temporary residents, including 485 visa holders, to obtain. This is because the car serves as security for the lender, reducing the risk.
- Unsecured Car Loans: An unsecured car loan does not require any collateral, meaning the lender cannot seize the car if you default. However, unsecured loans are typically harder to obtain and often come with higher interest rates. Since 485 visa holders may not have permanent residency, lenders may consider them higher-risk borrowers, making unsecured loans less likely for applicants without a strong credit history.
Steps to Apply for Car Finance as a 485 Visa Holder
- Check Eligibility: Not all lenders offer car loans to 485 visa holders, so it’s important to find lenders who specialize in offering car finance to temporary residents. Some banks and financial institutions may have more rigid requirements, while others may have more flexible terms.
- Prepare Your Documents: Lenders will require several documents to assess your application. This typically includes proof of income (such as pay slips or bank statements), identification, proof of address, and details of your 485 visa. The more information you can provide, the stronger your application will be.
- Consider a Guarantor: If you’re finding it difficult to qualify for car finance on your own, having a guarantor—a permanent resident or Australian citizen who agrees to take responsibility for the loan if you default—can improve your chances of approval.
- Shop Around for the Best Deal: Interest rates, loan terms, and conditions vary between lenders, so it’s important to compare car loan offers. Consider using online comparison tools to find the most competitive car loan rates for 485 visa holders. Don’t hesitate to negotiate with lenders to secure the best deal.
Interest Rates and Loan Terms
Car loan interest rates for 485 visa holders may be higher than those for permanent residents, as lenders typically see temporary residents as higher risk. Interest rates vary depending on factors such as the lender, the loan amount, and the loan term. It’s important to ensure that the loan terms align with your financial situation, as higher interest rates can make monthly repayments more expensive.
Conclusion
Securing car finance on a 485 visa in Australia is certainly possible, but it requires careful planning and understanding of the lending criteria. Factors like your visa status, income, credit history, and deposit size will influence your chances of approval. By shopping around for lenders who offer car loans to temporary residents and preparing all necessary documentation, you can improve your chances of securing a car loan with favorable terms. With patience and the right approach, you can drive away in a new car while enjoying your time in Australia.
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.
