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What's Involved - Car Loans

As mentioned in Need a Loan - Car Loan, a critical requirement for the borrower is to prove to any lender they can afford the repayments for the new vehicle.


Importantly the primary purpose of the vehicle being purchased needs to be established, either;

  • Personal use
  • Business use


Buyers will need to prepare a income and expense budget to determine what they an afford in repayments. Whilst many households treat budgets as a negative distraction, Australian Federal legislation now makes it a requirement of all lenders to assess a borrower's budget and compare that to the loan repayments. Buyers should never risk allowing a third party individual to prepare the budget, as most often they will be wrong in the figures.

Buyers should prepare the budget for the lender ahead of applying for a loan and seek assistance from the ASIC web site Budget Planner if necessary.


Often lenders will require security for the loan, so in the event that the buyer default on the care loan repayment, the car securing this loan can be seized and sold to repay the debt.

At times due to the stable financial and employment position of the borrower, the lender may approve an unsecured personal loan, though beware of the interest costs as unsecured loans have higher interest rates than secured loans.

Special note: At times lenders will not accept a car sold privately as security and therefore not provide the borrower a car loan. Any buyer considering buying a car privately and needing finance, should contact us ahead of time to discuss their plans.

Loan Documents

With most lenders they will require copies of buyers documents to support the loan application, including, but not limited to the following;

  • Copies of identity documents (passport and drivers license)
  • Copies of bank statements showing balances
  • Copies of last 2 pay slips

Note, many lenders now days will make contact with a buyers employer to confirm the employee and their salary or wage levels.

Credit History

All lenders now undertake a credit check of borrowers to look at past credit history and a borrowing pattern.

Any recorded defaults listed will often lead to an immediate decline. If you are aware of previous financial problems, contact us prior to the purchase of any vehicle to discuss your previous financial

For more information on buying a car, please check out ASIC's website - Car Loans

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