Why Some Visa Holders Need a Larger Deposit for Car Finance
Getting a car loan as a visa holder in Australia can be challenging, and one of the biggest hurdles is the deposit requirement. While Australian citizens and permanent residents (PRs) can access low-deposit or no-deposit car loans, most temporary visa holders must provide a larger deposit to reduce lender risk.
In this article, we’ll explain which visa types require a higher deposit, why lenders impose this rule, and how you can improve your chances of securing car finance.
1. Why Do Some Visa Holders Need a Larger Deposit?
Lenders require bigger deposits from visa holders because they see them as higher-risk borrowers. The main concerns include:
✔ Visa expiry risk – If a borrower leaves Australia before paying off the loan, the lender could lose money.
✔ Limited credit history – Many visa holders don’t have an established credit score in Australia, making it hard to assess reliability.
✔ Employment instability – Temporary visa holders may be on short-term contracts or casual work, which lenders view as less stable income.
💡 Tip: A larger deposit helps reduce lender risk and can sometimes lead to lower interest rates.
2. Which Visa Types Require a Larger Deposit for Car Finance?
📌 Visa holders who typically need a larger deposit (20-30%) include:
| Visa Type | Deposit Requirement | Reason |
|---|---|---|
| Student Visas (500, 590) | ✅ 20-30% | No full-time income, high financial risk |
| Working Holiday Visas (417, 462) | ✅ 30%+ | Short visa duration, no stable job |
| Graduate Visa (485) | ✅ 20% | Limited credit history, uncertain long-term stay |
| Bridging Visas (A, B, C, E) | ✅ 25-30% | Uncertain immigration status |
| Tourist Visas (600, 601, 651) | ❌ Not eligible | No residency status, no job stability |
📌 Visa holders who may qualify with a lower deposit (10-20%) include:
| Visa Type | Deposit Requirement | Reason |
|---|---|---|
| Skilled Worker Visas (482, 491, 189, 186) | ⚠️ 10-20% | Considered lower risk due to full-time employment |
| Partner Visas (820, 309, 100, 801) | ⚠️ 10-15% | Long-term residency potential |
| Employer-Sponsored Visas (186, 187) | ⚠️ 10-15% | Higher income, job stability |
✔ PR holders and Australian citizens often qualify for no-deposit car loans.
✔ Skilled workers with stable employment may only need 10-15%.
✔ Students, working holiday visa holders, and bridging visa applicants face the highest deposit requirements.
3. How Much Deposit Do You Need for Car Finance?
The minimum deposit required depends on your visa type, income, and lender policies.
📌 Typical deposit requirements by visa category:
| Visa Category | Deposit Needed | Interest Rate Impact |
|---|---|---|
| Australian Citizens / PR Holders | 0-10% | ✅ Lowest rates |
| Skilled Workers & Employer-Sponsored Visas | 10-20% | ✅ Competitive rates |
| Temporary & Graduate Visas | 20-30% | ⚠️ Higher rates |
| Bridging & Working Holiday Visas | 25-30% | ❌ Very high rates |
💡 Tip: Some lenders accept a lower deposit if you have a strong income and job security.
4. How to Reduce the Deposit Requirement for a Car Loan
If you’re on a visa and want to reduce the upfront deposit, try these strategies:
✔ Improve your credit score – Paying bills on time helps build trust with lenders.
✔ Show stable employment – At least 6-12 months with the same employer improves approval chances.
✔ Get a co-signer – Applying with a permanent resident or citizen reduces deposit requirements.
✔ Choose a secured loan – Using the car as collateral lowers deposit needs.
✔ Consider a novated lease – Some visa holders can finance a car through salary packaging, requiring little to no deposit.
💡 Tip: If your visa has a pathway to PR, some lenders may offer a lower deposit requirement in anticipation of your status change.
5. Best Car Loan Options Based on Deposit Size
📌 Which Lender Should You Choose?
| Deposit Available | Best Lender Type | Visa Types Eligible |
|---|---|---|
| 0-10% (Low Deposit or No Deposit Loans) | Banks, credit unions | PR holders, skilled worker visas (482, 491, 186) |
| 10-20% (Moderate Deposit) | Credit unions, specialist lenders | Graduate visa (485), partner visas (820, 309) |
| 20-30% (High Deposit Required) | Online lenders, private lenders | Student visa (500), bridging visas (A, B, C), working holiday visas (417, 462) |
✔ For the lowest deposit requirement: Apply with major banks or credit unions.
✔ For flexible approval: Consider specialist lenders or online lenders.
✔ If you have a high-risk visa: Prepare to save for a larger deposit or explore alternative financing options like personal loans.
Final Thoughts: Getting Car Finance as a Visa Holder with a Low Deposit
✔ Visa holders on skilled worker or employer-sponsored visas may qualify for lower deposit loans (10-15%).
✔ Students, bridging visa holders, and working holiday visa applicants need at least 20-30% upfront.
✔ Lenders may reduce the deposit requirement if you have strong employment, a co-signer, or a secured loan.
💡 Want to find the best car finance options based on your visa type and deposit amount? 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.
