How to Get Car Loan For Students

By Angela Monroe - January 28, 2022

How to Get Car Loan For Students

Getting a student car loan can be tough – most students would agree. It seems like the banks want full-time workers with years of employment history.

Fortunately, all is not lost when it comes to getting that perfect vehicle when you’re studying.

Here’s what you need to know when searching for a student car loan.

Firstly, why can it be tough?


A student car loan is like any other loan meaning that a lender (e.g. a bank) will lend money to a borrower if the conditions are right.

Some of these conditions include;

  • Income – you’ll need documented income to be able to pay back the money
  • Affordability – life as a student can get expensive when bills add up (despite a few instant noodle dinners), you’ll need surplus to make loan repayments
  • Documentation – like all loans, you’ll need photo ID, bank statements and sometimes proof of address and other documents
  • Credit history – if you’ve never had a loan before or struggled to pay one back in the past, it can be hard to convince lenders that you’re ready for the responsibility

Luckily, there are a few lenders out there that can help.

There are dozens of lenders operating in Australia that cater to different types of clients, circumstances and loan products.

It’s also important to note that interest rates can rise when there’s more risk involved in the loan.

More information on factors that dictate loan outcomes


Typically, the most important thing that lenders look at is employment or income. Casually employed borrowers are more risky as their jobs usually (not always) don’t have guaranteed hours or employment contracts that full-time work might have.

Ideally, if you’re casually employed, you’ll have at least 3 months history with the same employer and a decent number of hours each week.

  • Other income

Other forms of income like Centrelink support or cash in hand work can be harder to work with. For example, only some forms of Centrelink support can be used as income for a car loan. 


Often, lenders will want to have a look at the bank statements of applicants looking to borrow money. This is to check that they can manage their money properly and not spend too much on unnecessary things.

Things like gambling, frequent nights out and online shopping and gaming purchases can be evident on bank statements and may affect the outcome of a loan.

Over commitment can also make it tough for a student car loan. This means too many regular payments you’re committed to like streaming service subscriptions, phone and internet services, gym memberships and other loans.

Some regular payments are hard to avoid, others are easy to minimise.


Of course, you’ll be required to submit some documents when applying for a loan. Official photo ID like a driver’s licence or passport is usually the easiest but some students may not have these.

Note that on some occasions, you don’t actually need a driver’s licence to get a car loan, but it does help.

Payslips are another thing that borrowers often need. This is to prove income and employment and as many students are causally employed, some may not receive payslips.

Some lenders also require proof of address which means a bill or similar with your name and address on it. If living with mum and dad, it can be tough to come up with.

Credit history

Everyone in Australia typically generates a credit report when they first apply for credit and are over 18 years of age. Applying for credit could be a phone plan or utility bill.

You can request a copy of your credit report from reporting agencies like Equifax

In a nutshell, a credit file displays all credit history including things like;

  • Recent enquiries (each time you apply for credit, it’s recorded)
  • Repayment history (details of when you make loan repayments – on time or missed)
  • Some personal information like address history

Top tips to increase your chances of getting a student car loan

top tips

The time period prior to applying for a loan is your chance to get your ducks in a row. This means at least 3 months, but the longer, the better.

Ensure your address is stable and provable

Many students rent, board, live with family or all three. Try to keep the same address in the lead up to applying for a loan and gain the paperwork to prove it. This might be a bill or other official documentation with your name and address on it.

Lenders struggle with borrowers who have multiple addresses in a short amount of time.

Note you must have a fixed address to apply for a loan.

Inform your employer

If you’re casually employed, you might need a letter confirming your employment or more stable hours.

Keeping everyone on the same page can really help.

Keep your bank statements clean

“Clean” means no or minimal gambling and cash withdrawals, especially those late at night. If you transfer money to friends or family, make sure the descriptions are accurate and clear.

Also, if you have multiple streaming services and other memberships, consider cutting down to free up income for the loan repayments.

The goal is to have good money management skills and surplus for the loan repayments and be able to show it.

If you have any other debts, try to square them away before applying for a loan.

Think about the vehicle you’re looking at

It can be really tempting to aim for a sports or performance car but would a lending institution see it as a bigger risk? Yes, they likely would – that’s what the statistics show.

Try to aim for a reliable and realistic car, for example, something newish and from a major brand.

Organise a deposit

This one can be tough but saving a few thousand dollars for a deposit can really boost your chances at approval. 

Arrange a guarantor

Alternatively, if you can, a guarantor or co-borrower can really help. For example, a parent or elder family member is a good choice.

This is because co-borrowing with someone who has long-term employment and ideally a good credit history can ensure approval and even lower interest rates.

Student car loans in summary

Getting a loan for the first time can be daunting but there are a lot of benefits.

Firstly, you’ll get that nice car you’re after which can really help you expand employment and even work experience opportunities as you’ll be able to travel further and all hours of the day.

Building credit history is also a huge benefit. If someone servies a loan by making all the repayments, they’ll often be able to borrow larger amounts in the future. This means home loans and even business loans down the track.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.


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