Explore car loan options for non-residents and temporary visa holders working in Australia.
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Getting around in Australia as a temporary resident usually means you have to take the train. Or if you’re feeling a bit lavish, you can take a taxi or an Uber everywhere. Finding a lender or broker that will approve you for finance without Permanent Residency or Citizenship is difficult. It’s difficult, but not impossible.
Lenders are wary of temporary residents, even if they have a work permit, because they are higher risks than permanent residents or citizens. Since most work permits have an expiry, lenders would rather place a “sure bet” on someone who has no reason to skip out on a loan by returning to their home country. Sometimes, temporary visa holders my breach the limits of their visa by working more hours than they are entitled to, or with employers other than their visa sponsor. If temporary workers breach their visa conditions, it means instant cancellation and they must return home. Of course, these are worst-case scenarios, but banks and lenders think of every eventuality and factor that into their decision.
Banks and lenders generally favour temporary work visas and student visas with a path to permanent residency. If you have a visa sponsor, this can work towards your approval in the eyes of lenders. Arrivals with bridging or provisional visas without expiry dates are usually declined for finance, as income isn’t taken into consideration. These visas are dependent on a decision by the government, which could go either way.
If you are working in Australia with a temporary work permit, a lender may approve your car loan. However, a lender is well within their right to set a loan term that fits within your visa’s time limit. This means your repayments may be higher than loans with standard terms (five years is usually the standard.) Since you fit a higher risk profile, they may only approve your loan as a “sub-prime” borrower. “Sub-prime” borrowers tend to be people with bad credit. That means higher interest rates compared to the rest of the population.
Like any type of loan, it helps to have as much information about your finances and residency as possible so your lender can make an informed decision. Proof that you pay your bills on time and in full, that you have steady income and a sponsor that vouches for your good conduct helps you gain approval, and perhaps even a (slightly) better interest rate. As always, you should seek advice from a financial professional before applying for a car loan as a non-resident.
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