The trials and tribulations of getting a car loan aren’t easy, let alone if you’re on a maternity leave. However, before you start sulking and losing all hope, let it be known that it is possible to get a car loan while on maternity leave.
The great news is, seeing as you are on maternity leave, it often is paid leave. In such an instance, the majority of lenders take into account maternity leave payments as a stable income which will help increase your chances of getting that car loan.
On the other hand, being on maternity leave may raise concerns about the ability to meet car loan repayments (seeing as a baby is indeed on the way, and your expenses are expected to increase). In most cases, you will inevitably have to strengthen your financial standing to help prove your ability to meet those repayments.
Here are 7 great ways to help you get a car loan while on maternity leave.
Find a Co-Signer
Although this may not be an option for everyone, finding a co-signer to the loan could add that advantage to your loan application. After all, two incomes will look better than one, right? A co-signer does not necessarily have to be a partner but can also include family members and friends.
Fix Your Credit Rating
A lender will use your credit rating to gauge your ability to meet repayments. As such, it is critical to fix your credit rating as much as possible. You can do this by requesting a copy of your credit rating and checking it for any errors. Should you find anything on your credit report that doesn’t look right, you can contact the relevant credit reporting agency to correct the error.
Upfront Cash Deposit
Similar to getting a loan for a house, using an upfront cash deposit for a car loan will improve the chances for a successful car loan application. This option may not be feasible for everyone considering how having a newborn dependant will increase your monthly expense.
It is important to note that even if you have a small amount of cash available, you could stretch its potential further by opting for a cheaper car or a secondhand one.
Avoid Making Multiple Car Loan Applications
You should avoid making multiple car loan applications at all costs. It may be tempting to apply to as many as possible in hopes to have a lender approve you, however, for every loan application you make, it gets recorded in your credit history. The existence of multiple car loan applications in your credit history often will raise alarms to your potential lenders.
Using a Car Finance Broker
Car finance brokers are specialists in car financing. One of their everyday duties includes looking at car loan options offered by different lenders. By using a car finance broker, you have the help of a specialist who could help build your finances case, negotiate with lenders, and even find you options that you never knew existed.
Try Using Smaller Banks
Despite being around in the game for so long, big banks such as Westpac, NAB, ANZ, and Comm Bank may not be flexible when it comes to the pregnant woman seeking a car loan. Smaller banks, on the other hand, are focused more on creating good customer relationships with the additional step of trying to work together with you to suit your needs. After all, they need your business more than the bigger banks.
Pick a Used Vehicle
If you’re facing difficulty in finding a car loan while you’re on maternity leave, it could help to pick a used vehicle instead of a brand new one. Selecting a vehicle that is 2 to 3 years old will still ensure the latest technology and safety equipment the car world has to offer. Not to mention, a car that is 2 to 3 years old comes with a heavily discounted price when compared to a brand new version of it. At a lower cost, a used vehicle may prove to be an easier process for finding financing.