Securing car finance in Australia as a bridging visa holder can be challenging but is not impossible. A bridging visa allows individuals to remain in Australia while they await the outcome of their visa application or the transition to a new visa. While these visa holders may face more hurdles compared to permanent residents or citizens, it is still possible to finance a car if you understand the requirements and options available to you.
1. Understanding Lender Concerns
Lenders generally consider permanent residency or citizenship as more stable factors when assessing loan applications. With a bridging visa, you may not have the same level of security that lenders are looking for, which can make approval for car finance more difficult. Bridging visas are often temporary, so lenders may worry that the applicant could leave the country before the loan is repaid.
However, this does not mean that financing a car is impossible. If you can demonstrate your financial stability and a clear pathway to permanent residency, many lenders may still be willing to consider your application. For instance, applicants on bridging visas who are waiting for a skilled or partner visa approval may have an easier time getting car finance compared to those on short-term bridging visas.
2. Proof of Income and Employment Stability
One of the key factors lenders look at when approving car finance applications is the applicant’s ability to repay the loan. Bridging visa holders can increase their chances of loan approval by proving they have stable employment and a reliable source of income. Providing recent payslips, bank statements, and a letter from your employer can demonstrate that you are financially stable and capable of meeting the loan repayments.
If you are employed full-time or in a permanent position, you may have a better chance of securing a loan. However, if you are on a casual or part-time contract, it’s still possible to qualify, but you will need to show a consistent income history over a period of time. Lenders want reassurance that your income will be reliable for the length of the loan term.
3. Limited Credit History
Another challenge that bridging visa holders may face when applying for car finance is a limited or non-existent credit history in Australia. Australian lenders rely heavily on credit scores to assess a borrower’s risk. If you’ve only recently arrived in the country and have no established credit history, it may be harder to get approved for a car loan.
However, some lenders may consider your overseas credit history if you can provide relevant documentation, such as a translated credit report. Additionally, some lenders specializing in loans for temporary residents may be more flexible with their credit requirements. It’s a good idea to start building your credit history in Australia by paying bills on time or opening a local credit card.
4. Offer a Larger Deposit
One way to increase your chances of getting approved for car finance as a bridging visa holder is by offering a larger deposit. A larger down payment reduces the amount you need to borrow, which can make lenders feel more comfortable approving your loan. A deposit of at least 20% of the car’s value is recommended to show your commitment to the purchase and reduce the lender’s risk.
A large deposit not only increases your chances of loan approval but can also help you secure lower monthly repayments. If you’re able to contribute a significant deposit, the lender may feel more confident that you will be able to repay the loan, even if your visa status is temporary.
5. Consider a Guarantor
If you are unable to secure car finance on your own, you may want to consider applying with a guarantor. A guarantor is typically an Australian citizen or permanent resident who agrees to take responsibility for the loan if you are unable to make repayments. Having a guarantor with a strong credit history can improve your chances of approval and may result in more favorable loan terms.
It’s important to choose a reliable guarantor who understands the responsibilities they are taking on. If you miss any payments, the guarantor will be held liable for the debt, so both parties should carefully consider the risks before proceeding with this option.
6. Shop Around for Specialist Lenders
Not all lenders in Australia offer car finance to bridging visa holders, so it’s important to seek out those who specialize in providing loans to temporary residents. Specialist lenders understand the unique challenges faced by bridging visa holders and are more likely to offer flexible terms and conditions.
Some lenders, such as CarLoans4U, Savvy, and Auto Finance Online, offer car finance products specifically for temporary residents and bridging visa holders. These lenders may be more lenient when it comes to credit history and income requirements, making it easier for you to secure a car loan. However, be prepared for higher interest rates compared to loans for permanent residents, as bridging visa holders are considered higher risk.
7. Leasing as an Alternative
If securing a traditional car loan proves difficult, leasing a vehicle may be a viable alternative for bridging visa holders. Car leasing companies often have more flexible approval processes compared to traditional lenders, and they may be more willing to work with temporary residents.
Leasing a car has several advantages, including lower upfront costs and flexible lease terms. At the end of the lease, you can either return the car, purchase it, or extend the lease. Leasing might be a better option if you’re unsure about your long-term stay in Australia or if your visa situation is still pending.
Conclusion
Financing a car as a bridging visa holder in Australia can be challenging, but it’s not impossible. By proving stable income and employment, offering a larger deposit, or applying with a guarantor, you can improve your chances of securing car finance. Specialist lenders who cater to temporary residents and leasing options are also great alternatives. While interest rates may be higher and terms more restrictive, with the right approach, bridging visa holders can successfully finance a car 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.
