Car Loans for Veterans and ADF Members

Lender policies differ, but this is how military pay is often looked at:

• Base salary: generally counted in full.
• Allowances: regular allowances may be counted, often averaged over time. Some lenders set aside allowances tied to a particular posting or deployment.
• Reserve pay: may be counted alongside civilian income when it has been regular.

No occupation guarantees an outcome. Approval, rate and loan amount depend on the lender's assessment of your income, your living expenses and your existing commitments. We compare eligible options from our panel of 50+ lenders and explain how they differ.

DVA pays a range of pensions and allowances, and lenders treat them differently. Some lenders may count the service pension in much the same way as other government pensions. Others may consider some compensation or income support payments, count only part of them, or not count them at all.

Because policies differ from lender to lender and from payment to payment, we look at which lenders on our panel may be worth discussing for the payments you receive. Recent statements showing each payment help the lender see the full picture. Approval still depends on the lender's assessment and responsible lending requirements.

Salary packaging and novated leasing may be available to serving members, depending on the arrangements Defence has in place. A novated lease pays for the car and its running costs from your salary, partly before tax, which can be effective for some people depending on their tax position. Check what is offered to you and, if you need it, speak with a registered tax agent.

A novated lease bundles finance and running costs into one deduction, and there is a residual amount owing at the end of the term. A car loan is simpler, has no employer link, and stays with you when you leave the ADF.

Neither option is automatically better. We can put a car loan beside a novated lease quote you have been given so you can compare.

Leaving the ADF changes how lenders see your income, so timing matters.

• Before discharge: lenders assess the income you have now, and some will ask about your plans after your discharge date. Lenders have to consider changes to your income that they know about.
• After discharge: lenders can consider civilian employment and any DVA payments you receive, and some prefer to see a period in your new role first.

Be upfront about a planned discharge date. A loan that fits your service pay but not your civilian income is not a good outcome. We explain which options may be worth discussing at each stage.

Simple Loans holds Australian Credit Licence 509582 and is a member of AFCA. This page is general information and does not take your personal circumstances into account.