Why Newly Arrived Graduates and Partners Get Knocked Back for Car Loans
By Olivia Bennett
Visa Car Finance
Many Indian graduates on a 485 visa, skilled workers on a 482 and spouses who have just arrived on a partner visa are surprised when a lender says no to a car loan. They have a steady job and a decent salary, so what went wrong? Usually it isn’t the income. It’s a handful of things about being new to Australia that nobody explains in advance.
Your Indian credit history doesn’t come with you.
Credit reports aren’t shared between countries. However long your record was in India, you start with an empty Australian credit file. To a lender, an empty file isn’t bad, but it gives them nothing to go on, so they look harder at everything else.
Your visa dates shape the loan.
On a temporary visa, lenders generally want the loan to finish before the visa expires. If your visa has two years left, a five-year loan usually isn’t on the table, and a shorter term means higher repayments for the same car. Work out how much time is left on your visa before you choose the car, not after.
Applying everywhere makes it worse.
Every formal application can leave a record on your credit file. Several applications in a few weeks can make the next lender more cautious, even if each one was declined for a simple reason. It’s better to understand your position first, then apply once.
Simple protections that cost nothing, or almost nothing:
• You can get a free copy of your credit report from each credit reporting agency every three months. Check it for mistakes.
• Check your visa conditions and expiry on the free Home Affairs VEVO service, so you know exactly what a lender will see.
• Before buying a used car privately, do the $2 PPSR search at ppsr.gov.au. It tells you if money is still owed on the car, or if it has been written off or stolen.
• Be wary of “no credit check” offers and anyone pushing you to sign on the day.
Where to get free help.
Moneysmart (moneysmart.gov.au) has free car loan and budgeting calculators, and the National Debt Helpline (1800 007 007, ndh.org.au) has free financial counsellors who can look over a contract before you sign.
A car is often the key to a better job, especially outside the big cities. A little preparation before you apply can save months of frustration.
Olivia Bennett is in Partnership Management at Visa Car Finance, a car finance broker network for people on more than 88 visa subclasses. Read its guide to car loans on a partner visa. General information only, not financial advice
