Car Loan with 600 Credit Score? Here's How to Secure It (2026)

If you're considering getting a car loan with a credit score of 600, you might be feeling a mix of hope and uncertainty. A car is often a necessity, especially in Australia where the distances can be vast and public transport options limited. But a credit score of 600 can seem like a hurdle. The good news is, while it might be challenging, obtaining a car loan with this credit score isn't impossible. Let's explore your options and how you can navigate this process effectively.

Understanding Car Loans and Credit Scores

Before diving into car loans, it's crucial to understand what a credit score of 600 means in the Australian context. Credit scores in Australia generally range from 0 to 1200, with 600 considered below average. This score suggests lenders may view you as a higher risk, which can impact the rates and terms you're offered. However, it's not the end of the road. Many lenders, including those in Esteb and Co's extensive panel of 83+ lenders, offer products specifically tailored for individuals in your situation.

Car Loan Rates, Requirements, and Options

Interest rates for car loans can vary significantly based on your credit score. With a score of 600, you might see rates ranging from 8.5% to 15%. While these rates are higher than those offered to borrowers with excellent credit, they reflect the increased risk perceived by lenders.

Lenders will typically require proof of stable income, employment history, and sometimes a larger deposit to mitigate their risk. Options might include traditional bank loans, non-bank lenders, and even peer-to-peer lending platforms, each with its own set of criteria and terms.

How to Secure a Car Loan with a 600 Credit Score

Securing a car loan with a 600 credit score involves a few strategic steps:

1. Check Your Credit Report: Before applying, examine your credit report for any errors and correct them. This can sometimes give your score a small but crucial boost.
2. Improve Your Credit Score: If time allows, work on improving your credit score by paying down existing debts or ensuring timely payments on current obligations.
3. Save for a Larger Deposit: A larger deposit can reduce the amount you need to borrow, potentially lowering your interest rate and making you a more attractive candidate.
4. Shop Around: Use Esteb and Co’s access to over 83 lenders to compare offers. Different lenders have different criteria and might offer better terms than others.
5. Consider a Co-Signer: If possible, having a co-signer with a better credit score can bolster your application and help secure a more favourable rate.
6. Get Pre-Approved: Securing pre-approval can give you a clear idea of what you can afford and streamline the buying process.

Tips and Considerations

Here are some expert tips to consider:

• Negotiate: Don't be afraid to negotiate terms with lenders. Sometimes, a bit of negotiation can result in better terms.
• Understand the Loan Terms: Be clear about the loan terms, including any fees or penalties for early repayment.
• Consider the Total Cost: Look beyond the monthly payment to understand the total cost of the loan over its entire term.
• Be Realistic: Only borrow what you can afford to repay comfortably. Overextending can lead to financial stress.

Frequently Asked Questions

1. Can I get a car loan with a 600 credit score?
   Yes, it is possible to get a car loan with a 600 credit score, though you may face higher interest rates and more stringent requirements.
2. What is the average interest rate for someone with a 600 credit score?
   Interest rates can range from 8.5% to 15% depending on the lender and your specific financial situation.
3. How can I improve my chances of getting approved?
   Improve your credit score, save for a larger deposit, and consider applying with a co-signer.
4. Should I consider a loan from a non-bank lender?
   Yes, non-bank lenders can offer competitive rates and more flexible terms for those with lower credit scores.
5. Is a co-signer necessary?
   While not necessary, a co-signer can improve your application’s strength and potentially secure better terms.
6. How does Esteb and Co assist in finding a car loan?
   With access to over 83 lenders, Esteb and Co can help you find the best loan options available based on your financial situation.
7. What should I do if I'm denied a car loan?
   If denied, consider improving your credit score, re-evaluating your financial situation, and trying again after some time.