COVID-19 and Car Loan Eligibility – Are You in the Green Zone?
With the world, literally brought to a standstill with COVID-19, where does this leave you? Below we as simply as possible try explain the current eligible criteria.
COVID-19 and Car Finance Eligibility
Here we have explained who may be eligible for car finance:
1 – Centrelink/Pension Car Finance Eligibility
As long as you receive a Pension or combination of payments below, you could be eligible.
Eligible pensions include:
- Single Parent
- Partnered Parent
- Family Tax
- Aged Pension
- Carers, and lastly
- Newstart (only when coupled with Family Tax)
2 – Full-time Worker Car Finance Eligibility
As long as you have been at your full-time job 12 weeks and earning $800 or more per fortnight you could be eligible.
Additional COVID-19 changes: the above criteria remains the same, however, there are also additional criteria with some lenders depending on the type of job you have and whether it is essential or not. Ultimately, you will still need to apply to find out if you are eligible.
3 – Casual Worker Car Finance Eligibility
As long as you have been at your job 6 months and earning $800 or more per fortnight, you could be eligible.
Additional COVID-19 changes: There are also additional criteria with some lenders depending on the type of job you have and whether it is essential or not. You will still need to apply to find out if you are eligible.
COVID-19 and Car Finance – Who is now NOT Eligible?
During the COVID-19 Pandemic, these scenarios are not currently eligible:
1 – ABN Workers
Possibly the most impacted are ABN workers, whom, right now are not eligible during the COVID-19 pandemic. This may change but we cannot advise of any future changes.
Previous ABN Criteria: previously, as long as you have held your ABN for 12 months or more, and have at least 12 weeks or more of banked income earning $800 or more per fortnight you could be eligible.
2 – Job Seeker/Job Keeper/Newstart/Youth Allowance
Unfortunately, new Centrelink payments types, such as Job Seeker and Job Keeper as well as Newstart and Youth Allowance alone, are not eligible as they are not forms of stable income.
3 – Casual Workers
As mentioned above, if you have been at your casual job for under 6 months or not earning under $800 per fortnight you are not eligible at the moment.
Previous Casual Worker Criteria: previously, as long as you have been at your job 12 weeks and earning $800 or more per fortnight you could be eligible.
As you can see lenders are really tightening up the lending criteria, which will sadly impact some customers. However, if you are still unsure if you will be eligible or not, please contact us via our website enquiries or chat with us on Facebook messenger, we are happy to help!
How to Apply for a Car Loan with Unicorn Auto
If you think you are eligible based on the updated criteria above, apply now, it is really easy. Just type in all your basic info and submit it.
Then it will take you to the second page where it will ask you to upload:
- Last 3 months of bank statements
- Centrelink Income Statement
- Privacy form (to give us permission to submit your app)
- Last 2 payslips (If working)
Before applying, have a read of our tips to help you get approved for car finance!
5 tips and solutions to prepare for a car finance application.
1 – Minimise ATM cash withdrawals and excessive gambling:
As mentioned above, stop withdrawing cash for savings straight away. Lenders can now easily calculate the percentage of income being withdrawn at ATMs and lenders often view cash withdrawals as gambling, even if you are just putting it aside as savings!
How else can you put money aside to save?
Rather than withdrawing cash to budget or save, open a separate bank account and limit access, e.g. Do not activate a Debit card for the account. Online banking and immediate transfers between accounts makes it simple to create multiple accounts for a variety of uses. As an example, have a ‘rainy day fund’ for savings or an ‘everyday’ account for general living expenses. This shows lenders your capacity to manage your everyday expenses, savings and existing commitments, whilst also accounting for all income in your bank accounts.
2 – Prevent dishonours on bank statements and financial commitments
When applying for additional finance, it is important to show good repayment history with lenders on existing financial commitments. Consistent dishonours on your bank statements shows lenders an inability to manage your funds effectively.
But what if dishonours are out of your control?
Sometimes these dishonours are out of your control and most lenders are aware of this; so, if you find yourself in a situation where you could miss a payment, it is always best to contact the lender prior to the drawing date and attempt to organise a resolution. Credit assessors would prefer to see clients organise ‘make up’ payments rather than dishonour and avoid the problem, burying their heads in the sand!
3 – Avoid using payday loans for everyday expenses
Payday loans are a quick and easy solution for finance; however, they end up hurting borrowers with high interest and large ongoing repayments. Payday loans may be a viable option for unexpected emergencies or unforeseen financial situations, but they will have an adverse effect on your credit rating and chances at finance for the future.
But what if you don’t have enough money available for my commitments?
If you are struggling financially with your ongoing commitments, look into the possibility of obtaining a consolidation loan to manage your repayments and get on top of your financial situation.
Lenders will look unfavourably at the use of payday loans to facilitate general living expenses and could mean the difference between declining and approving your application.
4 – Avoid high volume of bank transfers
Some borrowers prefer to siphon funds from different accounts on a daily basis for existing repayments and general living expenses. Not only does this behaviour run the risk of dishonouring on financial commitments, but also makes it difficult for lenders to track your bank statement activity. The easier it is for lenders to evaluate the inflow and outflow of income and expenses, the faster they can reach an assessment decision.
How should you manage your bank accounts?
Try and keep your bank statement activity as clear and concise as possible so lenders can reach a decision without any degree of ambiguity. Simply put, try keep your money in the one account as much as possible.
5 – If you are uncertain about your chances of finance, ask for advice!5 –
If you have any questions about your borrowing capacity or how your application might look to a potential lender, it is always best to consult a broker! Simply put in your application online and we will pre-access it before sending it to the lenders.
Our team of Brokers at Unicorn Auto will help to find you a potential lender that will assist with your funding requirements or give you advice that will improve your financial application for the future. We will even give you free financial coaching with regular reminders emailed to you to help keep you on track!