Apply for Self-Employed Car Finance

Self-Employed Car Finance

Have you been doing the hard yards for yourself as a sole trader and looking to get finance for a new car? Then you have come to the right place. We understand there are a lot of everyday Australian’s who are in the same position. The good news is there are plenty of options for car finance for those who are self-employed. It only takes a minute to get started and it’s free.

The self-employed, entrepreneurs and business owners usually have limited options when it comes to car financing for various reasons. Normally when applying for a loan, most lenders require you to have up to date financials includingย  two years of tax returns.

Luckily, there are options available for self-employed people that makes it easy to get approved for car financing. These self-employed car finance options include a Low Doc and No Doc Car loan and Chattel Mortgages.

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    Self Employed Car Finance Options

    A low doc car loan in simpler terms means a low documentation car loan. As you may be aware, most car loan applications require a lot of paperwork to prove that you are eligible for the loan and that you can afford to repay the loan. This car loan involves a lender approving a loan based on supplying basic supporting information. It is useful as it is offered to those who donโ€™t meet the standard lending criteria for example some self-employed individuals, contractors, freelancers, those who get paid in cash and those who may have a poor credit history. Note that even if you wonโ€™t need as many documents to apply for the loan, you may need a letter from an accountant who will support your application and ability to make repayments.

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    Benefits of a Low Doc Car Loan include;

    • Minimal paperwork
    • Loans available for new businesses
    • Can be used for other business-related equipment.
    • Fixed interest rates
    • Easy monthly repayment structure

    A lender may provide the funds for you to purchase the vehicle which you will take ownership of at the time of purchase. The financier places a mortgage on the vehicle whereby the vehicle acts as security against the loan. Though once the contract ends and you finish paying off the loan, you take complete ownership over the vehicle. You can pay back the loan installments on a monthly, fortnightly or weekly basis as it all depends on the arranged agreement. For this loan type, you can choose to pay a lump sum amount to reduce the amount you owe which is normally referred to as a Balloon Payment. Last but not least, you can finance a new or used vehicle and equipment of reasonable age and condition. The amount financed may also include your on road charges and insurance as well.ย 

    A Chattel Mortgage repayment calculator can be used to determine how much your repayment amount will be and also to compare the different car loan options as well. All you need to do is enter the loan amount, term of the loan, the interest rate and repayment frequency.

    A Chattel Mortgage is similar to a secured car loan in the sense that a financier loans you money to purchase a business vehicle and you take ownership of the car upon purchase but the vehicle will act as security to the lender until you pay off the entire loan. Therefore the โ€œchattelโ€ is your car and the mortgage is the loan itself.

    The difference between this loan and a secured car loan, is that a Chattel Mortgage is mostly used by business owners and operators e.g., tradies and itโ€™s a loan specifically built for commercial car purchases. This kind of vehicle finance may allow you to claim various tax deductions not available to consumers.

    Some of the benefits of this financing option include;

      • You have the option of setting up a balloon payment at the end of the loan term so as to lower your monthly repayments.
      • Interest rates are usually lower than unsecured loans since the vehicle is acting as collateral
      • Repayments are flexible and can be fixed at the same amount each month or can be structured to fit your cash flow requirements

    Your business has the ability to claim for a tax deduction for the depreciation on the vehicle as well as the interest component of the loan repayments depending on how much you use your car or equipment for business use.

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    Braid Finance is always more than happy to answer any questions you may have. All of our customers applications are individually assessed. If you have any urgent questions while we get back to you. Get in touch with us today.

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