Car Loans – Get Approved on Workers Comp (2026)

Finding yourself on workers' compensation can be a stressful time, especially when you're thinking about major financial decisions, like buying a car. You might be wondering, "Can I get a car loan while on workers' comp?" The good news is, you're not alone, and there are options available to help you secure a car loan, even in this situation.

Understanding Car Loans and Workers' Compensation

When you're on workers' compensation, your income might look different than it did before your injury. Workers' compensation is designed to provide financial support while you're unable to work, but lenders often see it as a less stable form of income compared to regular wages. Knowing how this affects your ability to get a car loan is crucial.

Car loans are typically secured loans, meaning the vehicle acts as collateral. Lenders assess your ability to repay the loan by evaluating your income, credit history, and overall financial situation. Being on workers' compensation doesn't automatically disqualify you from obtaining a loan, but it does mean lenders will look more closely at your financial health.

Car Loan Rates, Requirements, and Options

In 2026, car loan interest rates in Australia range from approximately 6.49% to 12%, depending on your credit score, the lender, and the loan term. It's essential to understand the specific requirements and options available to you.

With access to over 83 lenders, Esteb and Co can assist you in finding the right lender who understands the nuances of workers' compensation income. Some lenders may be more flexible, considering the stability of your workers' comp payments and any additional income you might have.

Steps to Secure a Car Loan While on Workers' Comp

Securing a car loan while on workers' compensation involves several practical steps to ensure you present a strong case to potential lenders:

1. Assess Your Financial Situation: Understand your monthly workers' comp payments and any other income streams. Calculate your monthly expenses to determine how much you can afford for a car payment.
2. Check Your Credit Score: Knowing your credit score gives you an idea of what loan terms you might qualify for. Aim to have a score of at least 600.
3. Gather Documentation: Prepare documents that verify your income, such as workers' compensation statements and any other income sources like a partner’s income or rental income.
4. Consider a Co-Signer: If your credit history is not strong, having a co-signer with a good credit score can improve your chances of securing a loan.
5. Consult with a Mortgage Broker: Reach out to experts like Esteb and Co to explore various lenders who may be sympathetic to your situation.
6. Compare Loan Offers: Once you have potential offers, compare interest rates, fees, and terms to find the best fit for your financial situation.
7. Read the Fine Print: Ensure you understand all terms and conditions before signing any loan agreements.

Tips and Considerations

Here are some expert tips to consider when applying for a car loan while on workers' compensation:

• Stability is Key: Lenders look for stability in your income. If your workers' comp payments are consistent and long-term, highlight this in your application.
• Improve Your Credit: If possible, work on improving your credit score before applying. This can open up better loan options.
• Be Honest: Always provide accurate and honest information to potential lenders. Any discrepancies can harm your credibility.
• Explore All Income Sources: If you have other income (e.g., rental income), include this in your application to strengthen your financial position.
• Seek Professional Advice: Consulting with a financial advisor or mortgage broker can provide valuable insights and tailored advice for your unique situation.

Frequently Asked Questions

Here are some common questions about obtaining a car loan while on workers' compensation:

• Can I apply for a car loan with bad credit while on workers' comp? Yes, but it may be more challenging. Consider a co-signer or focus on improving your credit score first.
• Will my workers' comp income be enough? It depends on the amount and stability of your payments. Lenders will evaluate your overall financial situation.
• Are there lenders who specialise in this situation? Yes, some lenders are more flexible and understanding of workers' comp income. Consulting a broker can help identify these lenders.
• What if my workers' comp payments end? Lenders will want assurance of your ability to continue payments, so any additional income or savings can be beneficial.
• Should I wait until I'm off workers' comp to apply? If possible, waiting may improve your chances, but it's not always necessary with the right approach and guidance.
• How do I prove my income? Provide official documentation of your workers' comp payments and any other income sources.
• Can Esteb and Co help? Yes, with access to a panel of 83+ lenders, Esteb and Co can assist in finding a suitable lender for your situation.