Australia car loans
As the only country in the world that's also a continent in its own right, Australia offers boundless opportunities to explore its rich and varied cities, towns, bush and desert by car. And that's not forgetting the vast amount of coast where you can drive on a long holiday or just a weekend break. Owning a car is essential for the vast majority of Australians, whether it's to get to work, take the kids to school, do the shopping, visit friends or take to the wide open roads on a voyage of exploration. If you want to buy your first car or upgrade to a brand new one, Australia car loans could turn your dreams into reality.
How do car loans in Australia work?
In a competitive market, you'll discover that interest rates are kept low and there is a wide range of financial institutions offering personal loans to buy cars. You can make applications online, by phone, or go to a bank or other lender's branch or office to talk through your options.
Your choice of car loans will depend on your personal circumstances, and you may also have preferences when it comes to deciding what suits you best. A secured loan, for example, where your car, your property or another valuable asset is used as a guarantee for the loan, will usually have a lower interest rate than that of an unsecured loan. Your credit history will be checked and you can usually negotiate with your lender to get the terms best suited to you.
What are the main features of car loans in Australia?
You can be offered a number of different types of car loan, with interest rates that could be variable or fixed. Features may include the option to make flexible repayments to suit your cash flow, or introductory offers with very low interest rates for a fixed period.
A balloon payment arrangement offers you smaller regular payments with a large one at the end of the loan term, but you could refinance if you don't have the money to pay that back at once, settle the debt, and repay the new one in instalments.
Flexible payments permit you to make more than your minimum repayment, but you may be restricted by your lender as to how many times you can do this. Watch out for additional fees that lenders may charge for this option, and always examine penalty clauses and up front fees, as well as interest rates, before you make a decision.
What are the pros and cons?
Lenders will advertise an interest rate, but you should always use a loan comparison tool to factor in all the fees and charges, not just the interest rate. It's easy to be baffled by the jargon, so rather than guessing, take the time to get an accurate idea of how much each loan really costs.
To get the best deal available, always use the comparison rate instead of the lender’s advertised rate. The comparison rate factors in any additional charges and fees that are applicable to each loan offer, thereby giving you a more accurate illustration of the true cost of each loan. Use a loan calculator to help you to work out the monthly payments you will need to make.
Read your car loan agreement carefully before making a commitment to avoid running the risk of defaulting on your payments, which could ultimately damage your credit history.