Car loans for pensioners are available in the market place for people who are on a pension after car loans. Used cars Australia wide are still financed by people who are on a pension through finance companies and short term money lenders in the main.
Pensioner loans, car loans for pensioners, pensioner car loans are terms or phrases used by people on a pension when looking for a loan or car loan; however it is important to note that this is not a type of loan. Pensioners looking for a car loan, will if successful almost always have a secured personal loan, and depending on the amount you are looking for, and your income level, a lender will often require more equity in the deal; which could mean a larger deposit is required than for someone who is not on a pension, all other factors being equal solely due to the income level, or it could mean that you may be approved for a lesser amount meaning the used car will need to be cheaper.
Before you enquire about pensioner car loans though it would be a good idea to get a copy of your credit file, to find out exactly how many credit enquiries and defaults are listed and how many times you have been declined. My Credit File Report will not only give you a copy of your credit file, but you will receive a tailored credit file report that explains in simple terms what your credit problems are; and suggest ways you can repair your credit rating so you can be better prepared when applying for car loans.
Often too the lender will want the extra deposit to be from savings, and may ask for proof that the amount did come from savings by requesting a copy of your bank statement for the most recent 6 months history. This shows the lender that you can afford the car loan repayments because you have saved; gone without that amount of money, and it has been surplus to your lifestyle.
Savings goes a long way in showing a prospective lender that you can afford to make the repayments on a car loan. If you can show you can go without say $100 a week, and regularly save that $100 dollars in your account for 6 months when it comes time to ask a lender for money, if the repayments are less than that $100 you have proven you could have made the payments on the car loan. You have become less of a risk to the lender, and even on a pension you have shown proof that you are a good risk; providing of course you have paid all your commitments on time in that 6 month period.
Car loans for pensioners that are regulated under the UCCC (Uniform Consumer Credit Code) are no different to a loan for any other person except that one of the criteria lenders have for deciding whether to approve the loan or not will be looked at a little closer and that is affordability. Lenders have a responsibility to make sure that they are not going to place people in undue financial hardship by approving a loan that can not be repaid, so people looking for car loans on a pension will need to think about and know exactly what amount they can afford to repay each week or fortnight before applying for a car loan.
Don’t forget too that when a car is under finance it must have comprehensive car insurance on it at all times, so factor the cost of car insurance into your budget.
Sometimes you may not be able to pay the car insurance premium off on a monthly installment so before applying for a car loan on a pension obtain a car insurance quote first.
It is also worth remembering that each application is assessed on its merits, and each lender; even payday lenders will have their own lending criteria for the car loans that they offer, so do some research first to find the best car loan for you taking your own situation into account before making an enquiry or application. Too many enquiries on your credit file can cause you problems. If you are unsure of your credit rating, receive a copy of your credit file and a comprehensive credit file report with your credit score at My Credit File Report.
