If you are married or living with a partner, you have options for how you present your finances to a lender.
Each lender has a different policy for how they assess "partner income" and whether they include it in your loan affordability assessment.
Most people assume their only option is a Joint Application, but that creates a new set of challenges (especially if your partner's credit score is lower).
In this week’s customer story, we look at how one customer leveraged her household income to achieve a prime result, without putting her partner's name on the loan.
Customer of the Week
Our customer was looking for a 7-seater Mitsubishi Pajero to move the family around.
She had a solid Credit Score (632) and needed a loan around $40,000 to secure the vehicle.
Problem
She is currently working part-time.
While her credit history was good, her individual income wasn't high enough to pass the lender’s standard "affordability" check.
She lives with her long term partner which gave us more options to structure an application to their advantage.
Some options that we considered included:
1. Individual Application
The loan repayments would be too expensive given her part-time income, and the application would be rejected.
2. Joint Application
We considered adding her partner to the loan to boost the income.
However, when you submit a joint application, the lender often prices the risk based on the lower credit score of the two.
In this case, the partner’s credit score was lower and would have excluded them from the cheaper loan options.
An approval could have been secured, but it would have been at a much higher cost.
3. Individual Application with Partner Income
We found a prime lender that allows a solo applicant to include their partner’s income to offset household living expenses.
Even without adding the partner to the loan.
This allowed her to be assessed on her Good Credit Score while using the Household Income to prove she could afford the repayments.
The Result
Option 3 led to a far superior outcome and an approval with a prime lender at a single digit interest rate.
An outstanding result considering the starting point.
If she applied directly to a lender it may have been rejected instantly!
Another great result, but we’re not done yet…
Sourcing the Car
With the loan approval in hand, our customer knew exactly what she wanted but didn’t know where to find it.
While our internal car sourcing team focuses on NSW and QLD, our partner network extends nationally.
We jumped on the phone to one of our trusted contacts in Frankston, Victoria.
They looked after her immediately, offering a fair price on her trade-in and locking in a near-new Pajero Sport within her $40k budget.
The Takeaway
It is possible to utilise your household income in an individual loan application.
You just need to know which lenders will accommodate this within their credit policy.
Our expert team lives and breathes these policies every day. We know exactly where to look to find the solution that fits your circumstances.
Well done to the team on another great customer outcome.
Co-Borrower Applications
Adding a co-borrower to your car loan seems like a simple way to improve your chance of approval.
But as seen in this week's story, it isn't always the best move.
If your partner has a lower credit score, adding them can actually increase your interest rate.
Learn when to use a co-borrower (and when to avoid it) in the article below.
​Read the full article here​