A car loan is usually a secured loan, which means that the vehicle you are buying is considered as security. This means that if you are unable to meet your repayment commitments, the lender is entitled to repossess the vehicle.
You can use a secured car loan to purchase a brand new car, or in some cases a car up to 3 years old. It may be that the higher the value of the car, the lower the interest rate on the loan.
A used car loan will usually be used to purchase a vehicle that is up to 6 years old, and so does not qualify for a new car loan; the loan will, however, usually be secured against the vehicle.
An unsecured car loan is generally used to buy a vehicle more than 6 years old, and will usually have a higher interest rate than a secured car loan.
There is a huge variety of car loan providers in Australia and as a consequence a multitude of different products. Therefore, it is important to choose a car loan that meets your specific needs and circumstances.
Car loan pre-approved finance
Conditional approval for a car loan means that a lender has pre-approved in principle to lend you up to a certain sum to buy a car. Unconditional approval means that a lender agrees to a loan so that you can buy a specific vehicle.
Getting pre-approved for a car loan is an efficient way of going about things, as it means you don’t waste time looking at vehicles that you are not realistically going to be able to afford. It also puts you in a position where you might be able to negotiate a better price with a dealer or seller.
Car loan interest rates
Car loan interest rates tend to be fixed for the entirety of the agreement, which means you know in advance how much your borrowing will cost you, as well as what your monthly repayments are going to be. However, it is nevertheless possible to get variable rate car loans as well, if that better suits your circumstances.
Most fixed rate car loans are over up to five years, but a variable rate a car loan can be over a period of up to seven years, depending on the vehicle and lender. You are generally able to choose to make either weekly, fortnightly or monthly repayments.
With a variable rate pre-approved car loan, you can generally make additional repayments without being charged a fee, and some loans will offer a redraw facility as well.
Finding your new car just got easier
Our specialist loan advisers can make the whole process of buying a new car a great deal easier.
We can assist you in gaining pre-approval for a car loan by helping you prepare the relevant financial information required, as well as connect you with the right lenders and products to meet your specific needs.
In addition, as Finnciti is a car loan broker, we have access to a range of loans wth interest rates that individual borrowers are generally unable to obtain.
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