Car Loans for Pensioners
Competitive rates for pensioners. Get approved the easy way with Savvy.
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Competitive car finance options for pensioners
Looking for a car loan but living on a government pension? You’ve come to the right place. Savvy works with Australians from all walks of life to help them find car finance deals to suit their needs, and those receiving pension payments are no exception.
We can help secure you a car loan to suit your needs by partnering with a vast range of lenders who can work with diverse income streams, including employment income, pension payments and a combination of the two. Start your application now with a quick quote and find out your car loan options today with Savvy.
Car loan features for pensioners
Flexible income streams
We can match you with a lender able to work with your income stream, whether that be an age, disability (NDIS), veterans’ or carers’ pension.
Borrow upwards of $5,000
From a minimum of $5,000, pensioners can receive funds up to their maximum borrowing power.
Choose your repayment term
With loan terms available from one to seven years in length, you have a major say in the affordability of your pay instalments.
Structure repayments your way
Not only that, but you can also choose the frequency of your payments: you can opt for weekly, fortnightly or monthly instalments.
Bad credit applicants accepted
Even if your credit score or past borrowing isn’t perfect, Savvy will help you find a loan and lender who can work with you.
Fixed repayments
Because your interest rate is set at the beginning of your loan and doesn’t change, you can have a greater level of financial certainty between instalments.
Transparent fees
We outline all of the fees on your loan from the outset, so you’ll know what they are before you sign any contracts.
No deposit required
There's no obligation for you to make a deposit as part of your loan application, so you can avoid paying any lump sums during your term.
Why you can trust Savvy’s car loan service
Access to flexible lenders
We partner with specialised lenders who are dedicated to working with customers receiving a pension, maximising your approval chances.
No application is too difficult
It doesn’t matter who or where you are across Australia: we treat every application as an opportunity to help you access much-needed financing.
Expert brokers
Our experienced loan brokers are here to walk you through the application process from start to finish and find suitable lenders and offers for your situation.
What our customers say about their finance experience
Savvy is rated 4.8 for customer satisfaction by 3368 customers.
Do I qualify for a car loan as a pensioner?
Eligibility
The primary eligibility points that you should keep in mind when applying for a car loan are the following:
- Total annual income of at least $26,000 to qualify for car financing (although this may be closer to $30,000 if you’re supporting a family on your own)
- Earning money via an acceptable source of Centrelink income, namely government pensions for advanced age, disability, caring for another individual or as a veteran
- Bad credit options available (such as to ex-bankrupts and those with previous defaults on file)
Credit check
With any type of car finance, our lenders must conduct checks on an applicant’s financial position to figure out if they’re suitable for a loan. This is part of an accredited lenders’ responsible lending practice. Your creditworthiness is expressed as a credit score. The higher your credit score, the lower risk you are in the eyes of lenders, which increases your chance of approval.
Remember: just because you’re receiving pension payments doesn’t mean you have bad credit. Your credit history and income are linked when applying for credit, but your income doesn’t influence your credit score. Credit applications and payments are recorded on your history and directly affect your credit score.
Your borrowing capacity
An applicant for a car loan has to demonstrate that they’re able to service or pay back the loan throughout the length of the entire loan term. As a pensioner looking for a car loan, you would need to show the lender you have enough income left over after paying your usual expenses (rent or mortgage if applicable, bills, food and other costs) to fulfil your repayment obligations. Your income can include your government pension plus any other income sources – such as income from part-time employment or superannuation.
Your Savvy consultant takes your initial quote and runs an affordability check based on the amount you’re looking for and your desired loan term compared with your income to determine whether you can afford to comfortably manage repayments. We’ll help you proceed with your application if you can reasonably afford it but, if not, we’ll come back to you and let you know what sum you can be approved for.
Supporting documents
You’ll be required to submit a series of documents with your formal application, which we review and submit to the lender on your behalf.
- You’ll need to show us your driver’s licence, front and back, but failing that you can submit your passport instead.
- You’ll have to submit your last two payslips if you’re working in addition to receiving a pension, as well as your Centrelink statements from the myGov website.
- You may also have to supply 90 days’ worth of bank statements.
- Additionally, you’ll submit an application form, signed consent form and credit guide, all obtained through Savvy.
Your questions about car loans on pension payments
Your helpful guides to getting a car loan on a pension
How having deposit could save you money
The less you must borrow, the more you save. When on a pension, if you have a deposit saved up can go a long way during your application. It shows lenders you’re responsible with money and are a lower risk, as they do not have to approve you for a higher amount.
For example, let’s say you take out a $20,000 loan with a 5% p.a. interest rate over five years. If you have a 5% deposit ($1,000) you could save $132.27 over the loan term; 10% ($2,000) you save $264.55; 20% ($4,000) you save $529.10 (all approximate.) Add to that your repayments would be slightly lower too.
Is having a co-signer an option?
If you feel you may have trouble getting approved for a car loan on a pension, you may want to ask your spouse, child, or close family member to become your co-signer to increse your chances of loan approval.
A co-signer is essentially a second applicant for the loan. Whoever agrees to co-sign your loan takes on equal responsibility for the loan in the event you cannot pay. Ideally, your co-signer is someone with excellent credit and finances – in effect, you piggyback onto their good finances to get approved. However, they’re on the hook, so make sure everyone knows what they’re liable for.
The different types of loans on offer
There are four main variations of loans on offer, in order of most common to least – secured, fixed, unsecured, and variable. A secured loan uses the value of the car as collateral against the loan. This means the car could be repossessed if you default on the repayments. Secured loans and are generally available for new cars or for those no more than a few years old and in good condition. A fixed rate loan refers to the fixed rate of interest which means repayments stay the same throughout. Fixed rate loans can be secured or unsecured. An unsecured loan does not have any asset to back it up and so usually comes with higher interest rates than secured loans. For loans with a variable rate of interest, which also means the repayments can change. They too can be either secured or unsecured.
Untangling credit scores and income
Some people believe that having a low or fixed income means they “automatically” have a bad credit score. Having one does not necessarily mean the other. Someone with a high income can have a terrible credit score – it all depends on the historical data to do with credit – how many loans you’ve applied for, if you’ve been rejected, whether your credit card is maxed out, and defaults (failure to pay loans.)
People with low income or on pensions may only use credit cards in an emergency and have their mortgage paid off – this usually indicates a good credit score. But the only way to know for sure is to check your credit score for free with a credit reporting bureau.
