Thinking of buying an electric car with an EV car loan? Looking to switch to a greener option for your ride? You’re not alone! A new survey has found 67% of Australians believe electric vehicles (EVs) are the future of transportation. The survey (commissioned by BMW Group) also found that close to 1 in 2 people would be willing to go fully electric when they purchase their next vehicle.
Despite this trend, financing remains the biggest concern when buying an EV. Fortunately, there is an eco-friendly loan process for EVs specifically designed to help more Australians make the switch. A green loan application for an electric vehicle could save you money while helping you achieve a more sustainable lifestyle.
What is a Green Loan Application for an Electric Vehicle?
Green loans, like an EV car loan, play an important role in facilitating eco-friendly purchases for everyday Australians. Designed to encourage businesses and individuals to make “greener” choices, these loans are only available to applicants who can prove they’re making an environmentally sustainable purchase. Often boasting lower interest rates or reduced fees, green loans can make EV ownership a more affordable solution.
Benefits of an EV Car Loan
Green financing for electric vehicles, otherwise called an EV car loan, can be an added incentive for any who may still be undecided about upgrading to an EV. This is because green loans typically offer a combination of the following perks:
- Lower interest rates: Many are surprised to hear they can get finance with a lower interest rate if they commit to buying an electric car. Lower interest rates can reduce the overall cost of the vehicle, potentially saving you money in the long term.
- Reduced fees: Some finance lenders will reduce or even eliminate fees on their electric vehicle green financing products. This ensures borrowers can make a more sustainable purchase without being hampered by ongoing fees.
- Flexible loan terms: A green loan often has greater flexibility than a traditional car loan. This allows you to tailor the product to suit your specific needs. For example, you might opt for a slightly longer loan term to make your monthly repayments more manageable.
What are the Eligibility Criteria When Applying for an EV Car Loan?
While lending criteria will vary between creditors, you’ll usually be assessed on the following when applying for an EV car loan:
- Your credit score: This is one of the most important aspects. Lenders will want to take a close look at your credit score and your recent credit history. These will determine the terms of your finance deal, so it’s vitally important that you protect your credit score.
- Your income: You’ll need to provide evidence of income during the application process. Acceptable forms of proof usually include recent tax returns, payslips or bank statements. If you’re currently self-employed, then you’ll need to provide up-to-date business financials (prepared by your accountant).
- Your vehicle specifications: As part of the eco-friendly loan process for EVs, you’ll need to demonstrate that you are actually intending to buy a hybrid or electric vehicle. This is to ensure you don’t obtain a green loan and then use it to buy an oversized diesel-powered Ute.
Steps to Secure a Green Loan
What should you expect during the application process? You’ll usually need to complete the following steps to secure a green loan:
1. Research: Start by researching the different lenders who are currently offering this kind of product. An expert broker like Muscle Money can help you understand the available lender options for green loans.
2. Paperwork: Get all of your necessary paperwork together (including ID, proof of income, proof of current assets/debts, etc.).
3. Compare: Do an accurate comparison of the different finance products on offer. To ensure accuracy, make sure you thoroughly understand the various terms and conditions.
4. Fine print: Make sure you read the fine print. While a product may sound appealing when outlined in broad terms, you won’t really be able to judge if it’s suitable or not until you’ve read the fine print.
Don’t Worry – Muscle Money Can Help!
- If the above process sounds overwhelming, then don’t worry. Muscle Money can provide all the help you need with your green loan application for an electric vehicle.
- We have both online and in-person assistance available, allowing you to access tailored loan options in whatever method you’d prefer.
- We can compile a list of the various products available and then conduct an accurate and detailed comparison to isolate which lender will be most suitable for your needs.
- We can ensure your application includes all the necessary paperwork, so you won’t have to stress about unnecessary delays.
- Our team will talk you through the fine print, so there are no nasty surprises when it comes to terms and conditions.
- We’ll make sure your credit score is protected throughout the borrowing process. If we think you’re unlikely to get approved with a particular creditor, then we’ll recommend a different lender who will be more favourable to your current situation.
Are you one of the 67% of Australians who believe electric vehicles are the way of the future? Are you planning for your next vehicle purchase to be electric or hybrid? A green loan could help you achieve your goal sooner than you think. Start your green loan application today with Muscle Money’s easy online application process. Or give us a call for some free and tailored advice.
Caleb Waye-Harris, Senior Manager of Asset Finance at Muscle Money, has almost 15 years of relevant experience in the finance industry. His extensive background includes project management, consumer and commercial lending and asset-based lending.
