Introduction: Can 186 Visa Holders Get Car Loans with Higher Borrowing Power?
If you're in Australia on a Subclass 186 Employer Nomination Scheme (ENS) Visa, you’re in a strong position to apply for a car loan. Since the 186 visa leads to permanent residency (PR), lenders see you as a lower-risk borrower than other temporary visa holders.
✔ 186 visa holders can borrow higher amounts compared to most temporary residents.
✔ Stable employment, strong income, and good credit history increase borrowing power.
✔ Lenders prefer applicants with full-time work and at least 12 months of employment.
This guide explains how 186 visa holders can increase their borrowing power, qualify for larger loans, and get the best interest rates on car finance.
1. Why 186 Visa Holders Have a Borrowing Advantage Over Other Visa Holders
📌 186 visa holders have an advantage because:
✔ Permanent residency pathway – Lenders trust 186 visa holders since they are on the road to PR.
✔ Employer sponsorship – Shows job stability and long-term residency potential.
✔ No work restrictions – Unlike student or working holiday visas, 186 visa holders have full work rights.
✔ Higher income potential – Employer-sponsored jobs tend to have above-average salaries, leading to higher loan approval amounts.
🚫 Challenges:
❌ If you've recently arrived in Australia, you may have limited local credit history.
❌ Some banks require at least 6-12 months of work history in Australia before approving a high loan amount.
💡 Tip: If you're a 186 visa holder on the path to PR, mention this to lenders—it can help secure better loan terms.
2. How Much Can a 186 Visa Holder Borrow for a Car Loan?
📌 Your borrowing power depends on:
✔ Your income level – Higher salaries mean higher loan limits.
✔ Employment history – Lenders prefer at least 6-12 months of continuous employment.
✔ Credit history – A strong credit score improves borrowing capacity.
✔ Deposit size – A bigger deposit (10-20%) may increase the amount you can borrow.
📌 Typical borrowing power for 186 visa holders:
| Annual Income | Estimated Borrowing Power |
|---|---|
| $50,000 - $70,000 | $30,000 - $50,000 |
| $70,000 - $100,000 | $50,000 - $70,000 |
| $100,000+ | $70,000 - $100,000+ |
✔ If your salary is above $70,000, you’ll likely qualify for a higher car loan amount.
✔ If you’re earning under $50,000, you may need to provide a higher deposit or choose a lower loan amount.
💡 Tip: Use a car loan calculator to estimate how much you can afford based on your income and expenses.
3. How to Increase Your Borrowing Power as a 186 Visa Holder
📌 Ways to boost your borrowing capacity:
✔ Improve your credit score – Pay bills on time, reduce credit card debt, and avoid multiple loan applications.
✔ Show stable full-time employment – Lenders prefer borrowers with at least 6-12 months at the same job.
✔ Reduce other debts – Pay off personal loans or credit cards before applying for a car loan.
✔ Increase your deposit – A bigger upfront payment lowers risk for lenders and may allow you to borrow more.
✔ Choose a longer loan term – Extending the loan term can reduce monthly repayments, making a higher loan amount more manageable.
✔ Apply with a co-borrower – If you have a partner with PR or citizenship, applying together can increase approval limits.
💡 Tip: Lenders prefer applicants with a debt-to-income ratio under 30%, meaning your monthly loan repayments shouldn’t exceed 30% of your monthly income.
4. What Interest Rates Can 186 Visa Holders Expect on Car Loans?
📌 Interest rates for 186 visa holders depend on employment status, income, and credit history:
| Residency Status | Typical Interest Rate |
|---|---|
| PR Holders & Citizens | ✅ 5-7% |
| Skilled Worker Visa (482, 491, 186, 189) – 12+ months employment | ✅ 6-10% |
| Graduate Visa (485), Partner Visa (820, 309) – 12+ months employment | ⚠️ 9-15% |
| Student Visa (500), Working Holiday Visa (417, 462) | ❌ 15-25% |
✔ 186 visa holders with full-time jobs can access rates between 6-10%, similar to PR applicants.
✔ Those with limited work history or low credit scores may pay higher rates (10-15%).
💡 Tip: If you have strong employment and income, you can negotiate for a lower rate with lenders.
5. Which Lenders Offer the Best Car Loans for 186 Visa Holders?
📌 Lenders that offer car finance to 186 visa holders:
| Lender Type | Minimum Employment Requirement | Best For |
|---|---|---|
| Major Banks (ANZ, CBA, NAB, Westpac) | ✅ 12+ months in Australia | PR holders, skilled workers |
| Credit Unions (Beyond Bank, CUA, Bank Australia) | ✅ 6+ months | PR applicants, skilled workers |
| Online Lenders (Plenti, MoneyMe, Now Finance) | ⚠️ 3+ months | Temporary visa holders, fast approvals |
| Private Lenders | ⚠️ No minimum | High-risk applicants, higher deposits required |
✔ For lower interest rates: Apply with banks or credit unions.
✔ For faster approval with limited work history: Consider online lenders.
✔ If you have a high-risk credit profile: Private lenders may approve you, but expect higher rates.
💡 Tip: Some lenders offer pre-approval, allowing you to check your borrowing power before applying.
6. Alternative Ways to Finance a Car as a 186 Visa Holder
📌 If you don’t qualify for a traditional car loan, consider these options:
| Option | Best For | Key Considerations |
|---|---|---|
| Novated Lease (if employer offers it) | Full-time workers on 186 visa | Reduces taxable income but limits car choice |
| Rent-to-Own Car Programs | Temporary visa holders | Higher long-term costs |
| Co-Signed Loan with a PR or Citizen | Those with limited credit history | Requires a reliable guarantor |
✔ If you don’t meet lender requirements, alternative finance options may work for you.
Final Thoughts: How to Increase Your Borrowing Power as a 186 Visa Holder
✔ 186 visa holders have an advantage over other temporary visa holders due to employer sponsorship and PR pathways.
✔ You can increase borrowing power by improving credit history, saving for a larger deposit, and maintaining stable full-time employment.
✔ Lenders prefer applicants with at least 6-12 months of work history in Australia.
✔ Comparing lenders and securing pre-approval can help you find the best car finance deal.
💡 Want to find the best car finance options as a 186 visa holder? Compare lenders today at FinanceTheRide.com.au! 🚗💨
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.
