No Deposit Car Loans
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What is a No Deposit Car Loan?
A no deposit car loan, also called 100% finance or full financing, allows you to borrow the entire purchase price of a vehicle without providing any upfront deposit. For example, if you're buying a $25,000 car, you can borrow the full $25,000 and drive away without paying anything upfront (aside from government charges like registration and stamp duty, which vary by state).
In Australia, approximately 35-40% of car loans are approved with no deposit, particularly for newer vehicles (less than 5 years old) and borrowers with good credit scores (650+). This represents a significant shift from traditional lending practices where 10-20% deposits were standard. Lenders now recognize that many Australians — particularly first-time buyers, young professionals, and families — struggle to save large deposits while also managing rent, bills, and living expenses.
No deposit car loans are especially popular in metro areas like Sydney and Melbourne where the cost of living is high and public transport is unreliable. Needing a car to commute to work, but lacking savings for a deposit, creates a catch-22 that no-deposit financing solves.
How it works: The lender provides a loan equal to 100% of the car's purchase price (or valuation, whichever is lower). The vehicle serves as security for the loan, registered on the Personal Property Securities Register (PPSR). If you default, the lender can repossess the vehicle. Because there's no deposit buffer, lenders face higher risk — you owe more than the car's immediate resale value due to depreciation. This is why no-deposit loans typically have higher interest rates (1-3% more) and stricter approval criteria than loans with deposits.
Pros and Cons of No Deposit Car Loans
Advantages
- ✓Get a car immediately without waiting months/years to save a deposit
- ✓Keep your savings for emergencies or other expenses
- ✓Build credit history by making regular loan repayments
- ✓Access to better vehicles — borrow more for a newer, safer car
- ✓Tax benefits for business use (if self-employed/company vehicle)
Disadvantages
- ✗Higher interest rates (typically 1-3% more than with a deposit)
- ✗Negative equity — you may owe more than the car's value initially
- ✗Higher monthly repayments since you're borrowing more
- ✗More total interest paid over the loan term
- ✗Stricter approval criteria — need good credit and stable income
Who Qualifies for No Deposit Car Loans?
While no deposit car loans are available to a wide range of borrowers, lenders typically have stricter eligibility criteria than loans requiring deposits:
Typical Requirements for No Deposit Approval
- Credit score: 650+ is ideal, though some lenders accept 600+ (with higher rates)
- Employment: 6+ months in current job (full-time, part-time, or confirmed casual)
- Income: Minimum $500-$600 per week after tax, depending on lender
- Debt-to-income ratio: Total debts (including new car loan) under 40-50% of gross income
- Vehicle age: Typically less than 10 years old, though 7 years is preferred
- Vehicle condition: Must pass mechanical inspection (RACV/NRMA check)
- No recent bankruptcies: Bankruptcy must be discharged 2-3+ years ago
- Minimal defaults: No more than 1-2 small paid defaults in last 2 years
What if I don't meet these criteria? If your credit score is below 650, you're self-employed with irregular income, or you're buying an older vehicle (10-15 years), you may still qualify for no-deposit finance through specialist lenders. However, expect higher rates (12-18% p.a.) and may need to demonstrate stronger income or provide a guarantor.
First-time buyers: Lenders understand that young Australians (18-25) often lack credit history and deposits. Some lenders offer first-time buyer programs with lower deposit requirements (5-10%) rather than true 100% finance, but paired with competitive rates (7-9% p.a.) for graduates and young professionals with stable employment.
No Deposit vs. Low Deposit: What's the Difference?
Understanding the distinction can save you thousands in interest:
| Feature | No Deposit (100%) | Low Deposit (10%) | Standard (20%) |
|---|---|---|---|
| Deposit amount ($30k car) | $0 | $3,000 | $6,000 |
| Loan amount | $30,000 | $27,000 | $24,000 |
| Typical interest rate | 10-12% p.a. | 8-10% p.a. | 6-8% p.a. |
| Monthly payment (5yr) | ~$638 | ~$546 | ~$460 |
| Total interest (5yr) | ~$8,280 | ~$5,760 | ~$3,600 |
| Approval difficulty | Moderate-High | Moderate | Easy |
Key takeaway: Even a small deposit (5-10%) significantly reduces your total interest paid and improves your approval chances. If you can save anything — even $1,000-$2,000 — it's worth doing. However, if you genuinely have zero savings and need a car immediately (for work, family, medical reasons), no-deposit financing is a viable solution.
How Kreddi Helps You Get Approved
Applying directly to banks for no-deposit car loans is risky. If declined, the credit enquiry hurts your score and you don't know which lender to try next. At Kreddi, we specialize in no-deposit approvals:
- Lender matching: We know which of our 60+ lenders offer the best no-deposit terms for your situation (credit score, income, vehicle type).
- Single application: Submit once, we shop it to multiple lenders using one credit enquiry.
- Rate negotiation: We leverage our volume to negotiate better rates than you'd get applying directly.
- Application optimization: We present your application in the best possible light, explaining any credit issues and highlighting strengths.
- Fast approval: Our relationships with lenders mean faster processing — conditional approval in 24-48 hours.
Real example: Recently, a Sydney customer (credit score 680, full-time employment, $0 savings) was declined by CBA for a $35,000 no-deposit loan for a 2020 Toyota Corolla. We submitted the same application to Latitude Finance and Pepper Money — approved within 36 hours at 9.5% p.a. The customer saved an estimated $3,500 in interest compared to the rate they would have received from a sub-prime lender ($14% p.a.).
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No Deposit Car Loan FAQs
Yes! Many lenders offer 100% financing, meaning you can borrow the full purchase price of the vehicle without any deposit. However, eligibility depends on your credit score, income, employment stability, and the vehicle's age and condition. Lenders typically prefer applicants with good credit (650+ score), stable employment (6+ months), and vehicles less than 10 years old. If you have bad credit or are buying an older vehicle, you may need at least a 10-20% deposit.
No deposit car loan rates typically range from 7% to 15% p.a., depending on your credit profile. Borrowers with excellent credit (750+ score) may qualify for rates as low as 6-7% p.a., while those with fair credit (600-700) typically see 9-12% p.a. The rate is higher than loans with a deposit because lenders face more risk with a higher loan-to-value (LTV) ratio. A 10-20% deposit can reduce your rate by 1-3%.
While good credit (650+ score) makes approval easier, some lenders offer no deposit car loans to borrowers with fair or even bad credit. However, expect stricter conditions: higher interest rates (12-18% p.a.), lower maximum loan amounts ($40,000 vs $75,000), newer vehicles only (less than 7 years old), and higher income requirements ($600+ per week after tax). At Kreddi, we work with lenders who specialize in no-deposit approvals for all credit types.
The main downsides are: 1) Higher interest rates (1-3% more than loans with deposits), 2) Higher total interest paid over the loan term, 3) Negative equity risk (you may owe more than the car is worth if it depreciates quickly), 4) Higher monthly repayments, and 5) Stricter approval criteria. However, for many Australians, these trade-offs are worthwhile to get reliable transport immediately without waiting months or years to save a deposit.
Yes, but lenders are more cautious with used vehicles. Most lenders offering 100% finance for used cars require the vehicle to be less than 7-10 years old with under 120,000km on the odometer. Older or higher-mileage vehicles typically require a 10-30% deposit. The car must also pass a safety and mechanical inspection (RACV, NRMA check) and meet the lender's acceptable make/model list (no grey imports or modified vehicles).
No deposit car loan limits typically range from $5,000 to $75,000, depending on the lender and your financial profile. Most lenders cap no-deposit loans at $50,000-$60,000 for borrowers with good credit, and $30,000-$40,000 for those with fair or bad credit. Your borrowing capacity also depends on your income — most lenders require that repayments don't exceed 30-35% of your net (after-tax) income.
Typical fees include: Application fee ($0-$500, often waived), Monthly account-keeping fee ($5-$15), Early repayment fee (if you pay off the loan early, usually 1-3 months' interest), Late payment fee ($15-$35 per missed payment), and PPSR registration fee ($10-$15 to register the security interest). At Kreddi, we charge $0 broker fees — our service is free. Always read the loan contract to understand all fees before signing.
Yes! If you have a current vehicle to trade in, its value can serve as your "deposit" even if you don't have cash savings. For example, if you're buying a $30,000 car and your trade-in is worth $5,000, you only need to borrow $25,000 (83% LTV) instead of the full $30,000 (100% LTV). This improves your approval chances and can secure you a better interest rate. Note: If you still owe money on your current car, the trade-in value must exceed the payout amount to provide equity.