Securing a car loan in Australia as a 485 visa holder can be a bit more challenging compared to permanent residents or citizens, but it is entirely possible. The Temporary Graduate Visa (subclass 485) is issued to international students who have completed their studies in Australia, allowing them to stay and work for a specified period. While the 485 visa is temporary, many lenders in Australia offer car loans to those on this visa if they meet certain criteria. Here's what you need to know about getting a car loan with a 485 visa.
1. Understanding the 485 Visa and Loan Approval
The 485 visa grants temporary residency for 18 months to four years, depending on the applicant’s qualification and stream of the visa. As this is a temporary visa, it can sometimes present challenges when applying for a car loan. Lenders generally prefer applicants with long-term stability, such as permanent residents, because they are less likely to leave Australia within a short time frame.
However, if you have a stable income and employment, your chances of approval increase. The key is to prove to lenders that you have a reliable financial position and are capable of making consistent loan repayments throughout the term.
2. Proof of Stable Income and Employment
Lenders assess your ability to repay a car loan by evaluating your income and employment stability. If you are working in a full-time, permanent position, this will work in your favor when applying for car finance. As a 485 visa holder, you will need to provide proof of employment, such as recent payslips, bank statements, and a letter from your employer confirming your job status and salary.
If you are in a part-time or casual role, securing a car loan can still be possible, but it will require additional documentation to prove that your income is stable and consistent. Lenders want to know that you can meet the monthly repayments, so providing clear evidence of your financial stability is crucial.
3. Credit History and Score
Your credit history plays a significant role in the car loan application process. Lenders in Australia typically rely on your credit score to assess your ability to manage debt and make timely payments. A strong credit history increases your chances of being approved for a car loan, while a poor or limited credit history can make the process more difficult.
If you have lived in Australia for some time and have built a good credit score, this can significantly enhance your chances of securing car finance. However, many 485 visa holders are new to Australia and may have little to no credit history. In such cases, some lenders may consider other factors, like your job stability and income, instead of focusing solely on your credit score.
For those who have recently arrived in Australia, building a positive credit history by paying bills and existing debts on time is a good idea. Even small actions like using a credit card responsibly can help establish your credit score.
4. Larger Deposit or Guarantor
A larger deposit can increase your chances of getting a car loan as a 485 visa holder. Typically, a deposit of 20% or more of the vehicle’s value will reduce the lender's risk and may improve your loan approval odds. By offering a deposit, you show that you are financially committed to the purchase, making the lender more confident in your ability to repay the loan.
Another option is applying with a guarantor. A guarantor is an Australian citizen or permanent resident who agrees to take responsibility for the loan in case you default on payments. This extra security can significantly boost your chances of approval, especially if your credit history or income alone isn't enough to convince the lender.
5. Specialist Lenders for Temporary Residents
While major banks like ANZ, Commonwealth Bank, and Westpac may have more stringent requirements for 485 visa holders, there are specialist lenders that cater specifically to temporary residents. These lenders understand the unique circumstances of temporary visa holders and are more flexible in their approval process.
Lenders such as CarLoans4U and Savvy specialize in providing car finance to temporary residents, including 485 visa holders. These lenders are more likely to consider your current income and employment status rather than focusing solely on the length of your stay in Australia. Although the interest rates may be higher than those offered to permanent residents, these lenders provide viable options for 485 visa holders seeking car finance.
6. Car Leasing as an Alternative
If securing a traditional car loan proves difficult, car leasing can be a great alternative. Car leasing agreements are generally more flexible and often require lower upfront costs compared to purchasing a car with a loan. Leasing also allows you to drive a car without the long-term financial commitment, and it may be easier to qualify for compared to a standard loan.
Leasing also has the benefit of including services like maintenance and insurance in the package, which can make it more convenient for 485 visa holders who are uncertain about their long-term stay in Australia. For those on a temporary visa, leasing can provide flexibility and reduce the financial burden associated with car ownership.
Conclusion
Getting a car loan in Australia on a 485 visa is possible, though it may require some extra preparation. By demonstrating stable income, offering a larger deposit, or applying with a guarantor, you can improve your chances of securing a loan. Specialist lenders that cater to temporary residents and car leasing are alternative options to explore if you find traditional loans difficult to access. With the right documentation and a clear financial strategy, 485 visa holders can successfully secure car finance and enjoy the convenience of having their own vehicle 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.
