Car loans for casual workers

Am I a casual employee?

There are 2.7 million casually employed people in Australia. The casual workforce makes up 22% of all employees, so it's not uncommon.

If you're employed casually, you probably fall into one or more of the following categories:

• Do not have a permanent employment contract
• Are not paid for sick leave or annual leave
• Typically work irregular hours
• Can have their employment terminated at any time, by either party
• Receive a higher hourly rate to compensate for the loss of benefits

Finder survey: Have Australians of different ages ever taken out a car loan?

Can I get a car loan as a casual worker?

Yes, you can get a car loan as a casual worker. Because of the nature of casual employment though lenders may see you as a riskier borrower. This means some lenders may not accept you or you may need to provide extra evidence of your employment, income and expenses.

There are also usually requirements like earning a minimum income. Even if you earn above the minimum income requirement, you will need to prove your income is consistent enough to make car loan repayments.

Great, so how can I get approved for a car loan if I work casually?

None of these can guarantee you'll be approved, as that decision falls with the lender. But by following the below you'll have a better chance.

• Check the minimum eligibility criteria. As well as the standard age, employment and residency eligibility criteria, you'll usually need to earn at least $25,000 a year. For some lenders the minimum income is higher, so be sure to check each lender separately.
• Don't apply until you have worked for a couple of months. Check with the lender to see if they have any requirements for how long you must have worked at your current job. It may be at least a year in some cases.
• Apply for less than you can afford. You might need to settle for a cheaper car so that your repayments will be well below the theoretical maximum.
• Get a letter from your employer. The more evidence the lender has that your employment is stable, the better.
• Try with your existing bank. This is especially true if you have borrowed from it before and have never missed a repayment.
• Demonstrate your ability to save. Having a deposit and a long savings history is a great way to show you are reliable.
• Improve your credit score. Lenders will be more willing to lend to someone with an excellent credit score. Check your score for free here.
• Pay down other loans. If you have any other loans or financial commitments, it would be worth paying those off or reducing the limits.

How do I know if I can afford a car loan on a casual income?

Regardless of your employment status you should always work out how much you can afford to repay, and therefore borrow, before taking out a loan. In particular as a casual employee, you will have a much better chance of being approved if you apply for less than you can afford to repay.

To work out how much you could afford use the calculator below to get an estimate of your likely repayments. All you need to do is enter the amount you wish to borrow, the interest rate and the length of the loan.

Loan Repayment Calculator

Which lenders can I apply with if I'm a casual worker?

Is there anything else to consider before I apply?

First and foremost, you should consider how stable your employment is. Just because someone will lend you money doesn't mean you should necessarily borrow it. Try talking to your employer before taking out a loan to get an idea of the chances of your employment ending.

You must also consider whether the loan you are applying for is right for your circumstances. There are many car financing options available and a huge number of providers. Compare different options to work out which one will give you the best value.

Finally, don't apply for a loan that you are ineligible for as it will be marked on your credit history. Talk with the lender to make sure you are fully eligible before applying.

Frequently asked questions about getting a car loan as a casual worker

• Will I have to pay more because I am a casual employee?

  Not necessarily, but in practise, probably. As a casual worker you will most likely be deemed as riskier and so have less access to the lowest-cost products. However, if you have a long, clean record of borrowing and repaying money, an existing relationship with a bank and a decent income from casual work, you very well could be approved for a no fee, low rate loan.

• What if I work for multiple employers casually?

  Having multiple jobs is not necessarily a bad thing in terms of getting a car loan. In one way, it makes you a less risky customer as you have a more diversified income. You will need to prove your total income and all your places of employment. Having a long history of regular hours and income will help.

• What will happen if I stop working?

  You are required to pay back your loan, regardless of your employment status. Make sure you have a little bit of extra money to make the minimum repayments should you lose your job. Most lenders have some kind of financial hardship provision, so you should talk with your lender straight away if you think you will not be able to make a repayment.

Written by

Rebecca Pike

Senior writer

Rebecca Pike is Finder's senior writer for money. She joined Finder after almost four years writing for business publications in the mortgage and finance industry, including three years as editor of Mortgage Professional Australia. She regularly appears as a money expert on programs like Sunrise and Today, as well as across radio and newspapers. She also holds ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products. See full bio

Rebecca's expertise

Rebecca has written 201 Finder guides across topics including:

• Home loans
• Cost of living
• Budgeting