Some people prefer having two cars because this would mean both vehicles will require less maintenance and repairs as you will use them less often. However, despite the convenience of owning two vehicles, this demands you to shell out more money. After all, cars cost money to maintain, whether it’s through monthly car payments, insurance, or fuel. In addition, you'll have to handle the necessary paperwork before buying them.
But if you have all the money and requirements to buy an extra car, this begs the question: can you apply for two car loans simultaneously? Car loans have benefited many people, especially those who want to buy a car but can't afford to pay immediately.
In Australia, it can be possible to have two car loans simultaneously. However, you need to be mindful of the risks and challenges that come with it.
How Many Car Loans You’re Allowed to Have
As mentioned earlier, it's possible to have two car loans simultaneously in Australia. In fact, car loan brokers may advise you to own multiple cars as it can help raise your credit score. However, take note that you can only have one secured car loan at a time. A secured car loan is a type of loan wherein the car you're buying serves as collateral.
Meanwhile, you can have as many unsecured car loans as you want. An unsecured car loan is a type of loan that doesn't require any collateral. However, the interest rates are typically higher.
The Requirements for Applying for a Second Car Loan
Applying for a second car loan might be similar to your first car loan. Although, you have to remember that the exact lending criteria will still depend on your chosen lender.
Of course, as a general rule, you need a good credit history and a steady income to qualify for a car loan. Additionally, you must be an Australian citizen (or a permanent resident) who is at least 18 years old.
Aside from that, your debt-to-income ratio must be sufficient to cover the new loan. This means that your current monthly expenses should not exceed your monthly income. Lastly, remember that there may be alternatives to getting a second auto loan, such as refinancing your house to obtain a line of credit or borrowing additional funds.
Can I Get a Second Car Loan with Bad Credit?
According to car loan brokers, you might still be able to qualify for a second car loan. However, you must remember that getting approved will be more difficult, and you will likely have to pay a higher interest rate.
Of course, you must also remember that bad credit limits your options. Therefore, you should still try to improve your credit score before you apply for a car loan.
Final Thoughts
You can have two car loans simultaneously if you can make the payments on both. However, it is important to consider both loans' interest rates and terms before taking out a second loan.
Before taking on a second loan, you should also ensure you are comfortable with the monthly payment amount. If you have questions, it's best to consult a car loan broker who can help you understand your options.
Wealthy You is an Australian mortgage company you can trust for your second car loan needs. Our team of skilled and experienced car loan brokers will help you familiarise yourself with the process of a second car loan application and its inclusions. Get in touch with us today for more information!
