Car Loans for Pensioners

Competitive rates for pensioners. Get approved the easy way with Savvy.

No obligation. It won't affect your credit score.
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, updated on June 29th, 2023       

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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

Do I qualify for a car loan as a pensioner?

Your questions about car loans on pension payments

I’m on unemployment benefits. Am I considered a pensioner?

No. Unemployment benefits like JobSeeker or NewStart are meant to be temporary until a recipient finds a job. A pension is a fixed ongoing income. This can be derived from the Commonwealth aged pension, disability (NDIS) pension, carer pension, superannuation income, investment income, or reverse mortgage income.

What is a typical car loan interest rate?

Interest rates can vary quite widely – anywhere from 5% to 17% on average. The interest rate you can get on a loan will depend on your circumstances and credit score.

Can I get a car loan as a pensioner with bad credit?

It is possible to get a loan even with a poor credit score. It might mean you have to pay higher interest though. Our loan consultants at Savvy can help you access a car loan even with bad credit.

Can I get a car loan for a used car?

You may be able to get a car loan for a used car. However, if the car is older than 15 years you may have to settle for an unsecured personal loan, which will likely come with higher interest.

I’ve heard you can get pre-approval for a car loan. What is this and can I get it?

Car loan pre-approval is an “in-principle” agreement with a lender. The lender agrees to lend you a certain amount of money beforehand. This means you know how much you will have to spend on a car before you go car shopping. It’s always worth asking a lender about getting loan pre-approval.

How do I calculate the cost of a car loan?

A car loan calculator is a great tool for this. You can use Savvy’s tool to enter different scenarios regarding loan amounts and interest rates to get an instant result.

How long does the application process for a car loan take?

This can vary, but you can get a result on your application within 24-48 hours.

What if I encounter financial difficulty?

You must contact your lender as soon as possible to request a hardship variation or alternate arrangements for loan repayments.

Can I get a car loan if I receive a pension as a non-permanent resident?

Yes – we can accommodate non-residents and those living in Australia on an acceptable temporary visa if they earn part of their income through Centrelink payments. Speak to your Savvy broker about your car loan options as a non-permanent resident today.

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.

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