Do They Do a Credit Check for a Novated Lease?
Yes, a credit check is typically required when applying for a novated lease. Just like any other form of finance, the leasing company will assess your credit history to determine your eligibility and to set the terms of your lease, including the interest rate.
Why Is a Credit Check Required?
The credit check helps the finance provider assess how likely you are to meet the payments on your novated lease. By reviewing your credit score and financial history, the lender can gauge your risk level, which influences whether they approve your application and what interest rates they offer.
What If You Have Bad Credit?
While a low credit score can affect your application, it doesn't automatically mean you’ll be denied a novated lease. Lenders also take into account other factors, such as your employment stability and current income. These considerations can work in your favour, especially if you can demonstrate a reliable and steady income stream.
However, for applicants with poor credit, it's possible that the interest rates may be higher than those offered to people with good credit. This is a standard practice across financial products, as lenders need to mitigate the additional risk. That said, the overall structure of the novated lease, including tax benefits and running cost packages, remains the same regardless of your credit score.
What Lenders Look At Besides Credit Score
Employment Status: Lenders often look for stable, ongoing employment, as this shows you have the income to cover your lease payments.
Income: Demonstrating that your income can comfortably cover the monthly payments is critical, even if your credit score is less than ideal.
Other Debts: Lenders might also consider your other financial commitments, such as mortgages or personal loans, to assess your ability to meet the novated lease obligations.
Conclusion
While a credit check is a standard part of the novated lease application process, a less-than-perfect credit score doesn’t necessarily block you from leasing a vehicle. Lenders look at a range of factors, such as employment stability and income, and they may still approve your lease with slightly different terms.
Curious about whether you qualify for a novated lease? Contact us today to discuss your options and start driving the car you want.