Can non-residents get a car loan in Australia?
- Jun 26, 2021
This is a question that many non-residents living in Australia ask. The short answer is: yes but it's difficult. Also, it is important to know that you may have to pay a higher interest rate due to the more risky profile that non-residents have.
Getting Australian citizenship can make this process a lot easier. It is best to apply for Australian citizenship before you are ready to purchase a car. The process involves a test that shows that you have an understanding of Australian laws and the English language. To prepare for the test, you can easily practice the Australian Citizenship Test for free.
After you are confident with hundreds of questions, you can pass your official citizenship test. There will be 20 MCQs that will be selected from a pool of 200 questions and the duration of the final test will be 45 minutes.
If you are willing to apply for the car loan as a non-resident, we will be answering some of the concerns that will make it easier to deal with the situation.
Why is it difficult for non-residents to get a car loan?
As a non-resident, your situation is riskier than permanent residents, as it is uncertain where you will be in two years. Another important thing to know is that you may have a temporary work visa with an expiry. This can affect the approval of your loan for a new or used car. This is because temporary visas usually have higher risks involved with them in comparison to permanent visas.
How to make the process easier?
If you have some proof that you will have a job in Australia for the entire term of your loan, this helps you get a better interest rate. It also helps if you have another payslip showing your income in Australia as it shows that you are making full use of the part of your visa where you can work.
Also, if you have a steady income, this helps you out. Declaring your entire income and showing proof of all the bills that you pay on time helps lenders get a better idea about your financial situation.
What should you do?
For starters, you should check with a financial professional to see if you qualify for a loan. You can also talk to your employer and any other sponsor that vouches for your character. They will be able to give you all the information about your application and how it would affect you and your employment. It is important that the loan has enough time to be paid off before the expiry of your visa.
Non-residents, such as international students, can get car loans in Australia if they have a reliable income and sponsor. However, the temporary visas do come with a higher risk level so lenders may charge you more interest or give you a shorter loan term.
It's not always easy to get a car loan while you're a non-resident of Australia. But, if you've got the right things in place, and are prepared to put in the work, it can be a lot easier. We hope this article has given you the information that you needed to make an informed decision on your situation.