Can I get a discounted student car loan?

Being a student is tough enough, and while you might be able to score discounts on entertainment and shopping, the same can’t be said for buying a car, as banks don’t offer discounted student car loans.

Lenders make money on the interest and fees that they charge for loans, and the lowest interest and fees are typically reserved for the most reliable customers: applicants with excellent credit scores.

As a student, you are unlikely to have built up enough of a credit history to warrant an excellent credit score. However, there are ways of securing a low interest car loan if you can’t get an interest-free loan from the bank of mum and dad.

Apply for a guarantor car loan

You may want to consider a guarantor car loan, which offers a secured loan that’s supported by an eligible guarantor.

A guarantor is a third party, typically a family member, who agrees to make repayments if the borrower defaults on their loan. There is less risk to the lender having someone stake a loan application, meaning your application may be more likely to be approved with a guarantor attached.

Having a guarantor may also provide the opportunity to secure a better interest rate on your car loan.

Can I get a car loan as an international student in Australia?

Some lenders in Australia won’t offer car loans to international students. You’ll want to check directly with a range of financial institutions before applying for a car loan. However, some international students may be able to obtain personal financing for non-permanent residents.

Temporary visa holders might find it more difficult to secure a personal loan than a permanent resident or Australian citizen because banks and lenders generally consider them to be higher risk customers. Much of this perceived risk stems from the uncertainty of whether a temporary resident will be able to pay off their loan before their visa lapses.

Owing to this speculative status, lenders may also require temporary residents to pay higher interest rates on loans. This is, however, dependent on individual financial situations and can differ between lenders.

Other costs to consider when applying for a car loan

Aside from the interest rates you’ll be charged, you’ll want to be aware of the full terms and conditions of your car loan. It’s important to determine whether or not you’ll need to pay an upfront deposit or a balloon payment at the end of your loan term.

Once you’ve purchased your vehicle, you’ll need to ensure you’ve paid any necessary stamp duty, registered the car with the relevant authorities and have compulsory third party (CTP) insurance. You may also want to consider taking out a comprehensive insurance policy.

When buying a car insurance policy, consider calculating how much you’re likely to pay and asking your insurer about the features of the policy and how much your policy is likely to go up if you’re involved in an accident.

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