By using LoanPlace.com.au you will Save Time, Save Hassle, Save Money and ultimately find the very best pre-approval finance deal for you. No more roaming from website to website trying to pick up bits of information, and to find the best deals. To make things fast and easy for you we’ve put everything in 1 place – LoanPlace.com.au.
Whether you’re full time employed, part-time, casual, self-employed, retired or operating a small business, experienced professionals will help you find the right solution. Even If you’re on a working visa, a recent migrant or had credit problems in the past you will be matched with a specialist loan expert who can assist you.
LoanPlace.com.au is a free, independent service. We don’t arrange finance and aren’t tied to any particular lender or broker. To learn more about who we are and what we do click here.
If you want to know exactly how much you can borrow before you start shopping then a pre-approval is a great option for you. By organising your loan or lease in advance you can shop confidently in the knowledge that your finance is in place. Having a pre-approval gives you negotiating power as you’re effectively shopping as a cash buyer and can save you time on sales pitches and price negotiations.
If you know the following information a broker can work with you to organise pre-approved finance:
1. How much you’re looking to spend / borrow
2. Where you’re planning on buying the asset from e.g dealership, used yard, private sale, auction etc.
3. Approximate age of the asset that you’re looking to buy
Advantages of Pre-Approval
- Effective budgeting – You can determine your budget in advance and stick to it. By pre-arranging your finance based on how much you want to spend you remove the chance of making impulse buys and spending more than you can afford.
- Negotiation – When your finances are already in place you’re forced into playing ‘hard ball’. If the seller can’t get the price to fit within your pre-arranged budget you walk away and shop elsewhere. It’s amazing what can happen once the seller realises that your serious about your best offer.
- Choice – Access a range of different banks and finance companies in advance so you can get the best deal for your individual circumstances. Get options also from specialist lenders who only operate through intermediaries and do not market themselves direct to customers
- Tailored solutions – Work with experts and utilise their industry knowledge to get personalised options and handy tips.
Options are available no matter if you’re buying from a dealership, auction or a private sale.
LoanPlace.com.au is here to help you make sense of it all by providing you with information resources and connecting you with experienced professionals who specialise in pre-approvals and will search their lenders to find the latest deals so you get 3 Free Quotes to evaluate and compare.
Loan Approval Process
If you’re planning to finance your purchase consider whether you’ll meet the standard criteria to be eligible for a loan or a lease. Every bank and finance company differs in their approach but generally you’ll be required to meet the conditions outlined below. If you don’t then your chances of obtaining finance, especially from a mainstream lender, are slimmer. That’s not to say that it’s impossible and speaking with a specialist finance broker who knows which lenders may be able to assist someone in your circumstances is your best bet.
- Be at least 18 years old.
This is a non-negotiable. You won’t be able to get finance in your own name if you are under 18. Some parents may take out a loan on behalf of their kids but generally lenders want to see the user of the asset involved in the finance agreement.
In addition young borrowers who are over 18 may also face some challenges. Lenders are often wary of younger borrowers as their general lack of stability makes them a higher risk. You may have to consider a guarantor (mum or dad) or even a co-borrower to help strengthen your application.
- Be a current Australian resident (Temporary residents may still be eligible but it will usually depend on the type of visa that they hold and how long is remaining on it).
Non-residents are considered to be a higher risk because they may not have strong enough ties to keep them in Australia, and they may leave behind unpaid debt. It’s not unusual for finance companies to collect cars from airports that have been left behind by temporary residents who have no plans to return!
If you are a temporary resident then you may be required to put in a higher deposit, which shows a greater sign of commitment and gives lenders more confidence.
- Have a regular income.
The income that you receive will have to be sufficient to cover your living costs, expenses and your finance repayment amount. If your individual income is insufficient then you may be able to do a joint application with a partner or parent.
- Not be a bankrupt and preferably have a good credit rating.
If you have had credit problems in the past you may have to consider what is commonly known as a bad credit loan. Many lenders may overlook small defaults with telecommunication or utility companies but would be likely to take a dim view of larger amounts and defaults on loans or credit cards.
If you have a poor credit history then lenders will consider you to be a higher risk. As a result some lenders will not offer you a loan at any price. Other banks and finance companies who may consider your finance application will most likely charge higher interest rates. They operate on what is known as a rate for risk basis – in exchange for higher interest rates they will take on what they consider to be higher risk. This will make your finance and repayments more expensive.
Some lenders deal specifically with bad credit loans. They are often happy to take the risk to approve loans for people with credit history problems because they’ve handled many similar situations previously and have become expert in the area.
If you do get a bad credit loan you can potentially use this to improve your position for the future. Demonstrating an ability to borrow responsibly and make your repayments on time can help you in the process of repairing your credit history and put you on the road to lower interest rates.
Make sure you know exactly what you’re getting into before you sign up for a bad credit loan. Consider the fees and interest charges, the repayment amounts, the total amount payable, the term of the loan as well as the option to make extra payments.
Options are available no matter if you’re buying from a dealership, auction or a private sale.
- Be looking to borrow at least $5,000.
All lenders have minimum loan criteria and generally the mainstream lenders won’t lend less than $5,000. If you need less then you may need to look for a more specialist lender.
Help is available if you don’t meet the standard criteria – If you meet the above criteria there will generally be plenty of options available to you, but if you don’t there’s no need to despair because our loan experts specialise in finding solutions for people who don’t necessarily tick all the boxes.
How long will it take to organise the finance?
Each individual case is different and the speed of the application is usually dependent on a few key factors:
- The lender
Some lenders, especially those that provide point of sale finance at retail outlets, dealerships, car yards etc., specialise in giving fast decisions. They often have electronic credit scoring systems that are capable of making instant decisions on some applications as well as large lending teams that specialise in analysing credit applications to provide decisions within hours.
If you need a quick decision on your application beware of rushing into a loan or lease because it seems convenient. A pre-approval can be more effective as it allows you to shop around in the knowledge that your finance is already in place and you can concentrate on getting the best deal.
Be aware that finance brokers also have access to many of the same banks and finance companies as the dealerships so they can offer fast approvals in the same way. The main difference is that finance brokers have a wider range of lenders to choose from.
Banks can sometimes be slower with their application processing times. Most do not assess applications at the branch any more so they are sent off to central processing centres with the decision then being returned via the branch.
- The asset
Generally the more common the asset is the simpler and quicker the application process is. Cars, utes, vans and motorbikes are straight forward assets for most lenders so you can usually expect to get a quick decision on your application.
Trucks, boats, jet skis, caravans and motorhomes are regarded as more specialist types of assets and as a result the application can take longer as more work is required to analyse the application.
- The applicant
Applications for individuals are usually less complex which makes them easier and quicker to assess and make a decision on. The more complex the type of applicant the more time and more information is required to reach a decision. For example, a larger business with a more complicated structure will usually have to wait longer for a decision then an individual or a sole trader business.
*Make sure you take care with the information that you provide for your finance application. Honest and full disclosure is required otherwise your approval may be withdrawn. Once you have received your approval you will also be informed of any paperwork that you need to provide, for example, your driver’s licence, council rates notice or rental agreement, current payslips etc.
Once your finance approval is in place and you’ve arranged to buy your asset the next step is to organise for the loan to be settled.
Once you’ve provided any paperwork that the lender requires and you’ve signed the finance documents then the lender will arrange to make payment. Nowadays paperwork and documents can normally be emailed so the process can be quick and easy. So as long as you are organised and provide the required paperwork and attend to the documents promptly getting the keys to your new asset shouldn’t be too far away.
If you’re using the asset as security for your loan or lease then normally the lender will make payment direct to the seller. Once they can see the funds in their bank account they will give the OK to take delivery.
It is not unusual for it to take just 1 to 2 days from submitting your application to you taking delivery.
What can you include in the finance?
Depending on the amount that the lender is prepared to approve for your finance application you can include a range of expenses in your car loan even if you are using the asset as security.
As long as the expenses fit within the maximum loan amount that you are approved for most lenders are happy to finance the cost of:
- Dealer delivery
- Stamp duty
- Options and accessories
- Registration for 12 months
Many lenders are also happy to include the cost of:
- Comprehensive insurance
- Extended warranty
- GAP insurance
- Loan protection insurance
- Minus equity from a previous loan
Remember that the more extras that you include within your loan the higher the loan amount will be. The higher the loan amount the more interest you will be charged. So consider paying outright for some of the costs if possible. For example, if you include comprehensive insurance within your loan you’ll be charged interest over the full term for a policy that covers you for just the first 12 months. Also, after 12 months you’ll have to take out a new policy which you won’t be able to finance in the loan.
Check out our Other Great Learning Resources:
- How It Works
To learn how LoanPlace.com.au can help you get the very best pre-approval finance deal click here.
- Loan Options Explained
You have a wide range of pre-approval financing methods to choose from and compare, click on the options below to learn more:
- Bank and Finance Company Overviews
To learn more about the main players in the pre-approval finance sector click here.
- Buyer Tools
To access a range of great tools and obtain inside industry knowledge to help you get the very best pre-approval finance deal click here.
To get the latest news and tips click here.