Car Loan Calculator - Calculate Your Repayments
Calculate potential car loan repayments on new or used cars from 90+ providers, and find out how your credit score could affect your car loan rate.
- repayment calculator
- borrowing power calculator
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What is a car loan calculator?
A car loan calculator is an interactive online tool that can provide you with an estimate of your potential car loan repayments.
By inputting information such as your preferred loan amount, loan term and interest rate, the car loan calculator can estimate your potential weekly, fortnightly or monthly repayments, as well as the interest payable over the life of the loan.
How does RateCity’s car loan calculator work?
RateCity’s car loan calculator can give you an estimate of how much you can potentially borrow and how much it may cost to repay the loan. It also shows you some of the lowest advertised rates on RateCity’s database to give you an idea of what’s available in Australia. Here’s how you use RateCity’s car loan repayment calculator:
- Enter how much you’d like to borrow: You may have a rough figure in mind based on the car you want to buy, but you might like to consider entering different loan amounts to compare repayment estimates.
- Enter your preferred interest rate: A lower interest rate could mean lower repayments but be sure to also consider the comparison rate and any other fees that may be involved.
- Choose your repayment frequency: You can choose to make your repayments monthly, fortnightly, or weekly. This may help make it easier to see how the repayments could fit into your budget and pay cycle.
- Select a loan term: A longer loan term could mean more affordable repayments, but you could end up paying more interest over the life of the loan when compared to a shorter term.
- Compare car loans: Note that the calculator only provides estimates and has not taken into account your personal objectives and circumstances.
How can RateCity’s car loan repayment calculator help me?
By having an idea of the total cost of a potential car loan and what your repayments might be, you’ll be better armed with the information and research you’ll need to make an informed decision.
You can try putting in different interest rates and loan terms to compare how repayments could differ in various situations. Remember that using the calculator won’t affect your credit score, so you can use it as many times as you like to compare different amounts.
What does the borrowing power car loan calculator tell me?
Put simply, RateCity’s borrowing power calculator assesses your personal details and gives you a general idea of how much you may be able to borrow. By looking at your credit score and potential interest rate, as well as how much you can afford to repay and on which frequency, you’ll be shown an estimate of your “borrowing power”: aka how much you can borrow and service affordably.
What do I need to know about getting a car loan?
Before you make any applications, it’s important to be across the various factors that make up a standard car loan. Make sure you can afford the loan’s regular repayments, as failure to make repayments could result in losing your car and potentially being left with a bad credit rating. Here are some of the things you should understand before applying for a car loan.
- Interest rates – Loan rates are generally one of the first things you look at when comparing car loans, as it is one of the biggest deciders of how much your total repayment could be. The interest rate determines how much you'll need to pay back in addition to the original amount you borrowed. Be sure to not only compare the advertised rates but also the different comparison rates as these tend to include any additional fees and charges.
- Potential fees – Typical fees you may be charged include upfront fees or application fees, ongoing fees such as account-keeping fees, early repayment fees and redraw fees.
- Repayments – To clear your loan, you need to make regular repayments in either weekly, fortnightly or monthly instalments. The amount you will repay will depend on your interest rate, whether you are on a fixed or variable rate, fees, how long your loan term is and whether you have opted for a balloon payment.
- Lending criteria – Different loans will have different lending criteria, so it’s a good idea to make sure you meet the criteria for the loan product you’re interested in before you submit your application.
How can I find the best car loan for me?
To find the car loan that best suits your financial situation, it might be worthwhile considering the following:
- Credit score – The better your credit score, the lower your potential interest rate might be and the more likely a lender may approve your loan application. This is because lenders generally use your credit history as an indicator of your reliability.
- New/used car – New car loans are generally secured by the car and tend to offer lower interest rates. You may also be able to borrow more for new cars. For older used cars, you may need to apply for unsecured loans, which will have higher interest rates.
- Secured/unsecured car loan – A secured car loan means the loan is secured by an asset, which is typically the car you are buying. While most car loans tend to be secured, some are unsecured. These are generally for vehicles that are too old to be used as a security. Like personal loans, unsecured car loans often have higher interest rates than secured car loans.
- Fixed/variable rate – If your loan is on a fixed interest rate, it means the interest rate you’re on and the amount you are paying back will not change during the specified period. This gives you certainty about your regular repayments and the total interest you would be paying. If you’re on a variable rate loan, your car loan repayments and interest rate could move up or down.
- Loan term – Different terms can ultimately amount to different total costs. Generally, the shorter your loan term, the higher your monthly repayments may be, but this could also lower the total cost of the loan. A longer loan term may mean lower monthly repayments but a higher total amount, as you will be charged more interest.
- Balloon payment – What this involves is deferring part of the loan’s principal to the end of the loan. For instance, if you defer 25 per cent of a $30,000 loan, you will need to pay $7500 plus interest at the end of the term. This essentially lowers the regular repayment amount but it also means the loan’s total cost could be higher. Make sure you can afford to repay the lump sum at the end of the term if you’re considering opting for a balloon payment.
Are there any additional costs to consider when comparing car finance options?
Along with calculating how much you can comfortably afford to borrow to buy a car, it might also be worth factoring in any extra costs that can come with car ownership. In doing so, you may be better prepared for ongoing costs that are additional to your loan repayment, potentially putting you in a better position to make your repayments on time and avoid penalties. Some of the costs car owners might incur include:
- Stamp duty
- Motor vehicle registration
- Car insurance
- Regular servicing and repairs
- Road tolls
Is a car loan calculator the same as a personal loan calculator?
A car loan calculator and a personal loan calculator are very similar, apart from one key feature: the default interest rate. This is because the average interest rate for both car loans and personal loans differs significantly.
As a car loan is typically secured against the vehicle, and secured loans generally come with lower interest rates, the average car loan interest rate may be lower. Comparatively, the average personal loan rate may be much higher as it’s lifted up by the number of unsecured personal loan rates in the RateCity database.
So, when using the car loan calculator and personal loan calculator, you may find the default interest rate is different, and that if you don’t set an interest rate the estimated repayments may be higher for personal loans.
What is a car loan calculator?
A car loan calculator is an online tool that helps consumers understand how much they would have to repay under different scenarios. Consumers can create these different scenarios by entering different borrowing amounts, interest rates, loan terms and repayment schedules into the car loan calculator.
What are loan repayments?
Loan repayments are the regular payments you make to pay off your car loan. Loan repayments generally occur on a monthly basis, although many lenders will also give you the option of making fortnightly or weekly loan repayments.
What is a secured car loan?
A secured car loan is a loan that is connected to a form of security, or collateral. Generally, the security for a car loan is the car itself. If you fail to repay the loan, the lender might seize your car, sell it and then use the proceeds to recover their debt.
Where can I get a student car loan?
Student car loans are not a necessarily a product in and of themselves, but what you may be looking for is a guarantor car loan.
A guarantor car loan has a third-party act as a form of guarantee for your loan application, telling the bank or lender that if you default on your loan, someone will pay the loan repayments.
Going guarantor on a car loan is no new thing, and before internet-based credit scores, guarantor car loan applicants would apply for loans with a guarantor or property owner who could vouch for the person borrowing the loan.
To get a guarantor car loan, you’ll need someone willing to act as a guarantor for your car loan.
How to find a great car loan
Historically, finding a great car loan would require excess research ranging from visiting an excess of websites or making phone calls, but technology has moved on. Using RateCity, Australia’s leading financial comparison service, you can check out great deals from a range of lenders on the one site.
To start, select the amount you want to borrow and the length of the loan, narrowing your search to show just fixed or variable interest rate results.
Once you’ve indicated your search criteria, you’ll see an immediate list of lenders, ranked by interest rate or application fees. You’ll also be able to view the monthly repayment amount for each result, helping you to know what you can afford.
Up to six products can be compared side-by-side, complete with more information about each car loan, giving you more information about your options.
When comparing your car loan options, it’s ideal to keep in mind some points find a great car loan for your needs. Consider the following:
- Choosing a low interest car loan can reduce costs
- Selecting an option with low fees and charges is ideal, because these can really add up
- Be aware of penalties, such as early exit penalties if you pay off the loan sooner than expected
- Consider the features that best suit your situation
There are many ways to ensure that you get a great car loan. Ultimately, you’ll end up with the best deal by doing your research and selecting the most suitable product for you.
What is a guarantor car loan?
A guarantor car loan is a type of loan that features a guarantor on the agreement. The guarantor is a third-party individual, often a friend or relative, who guarantees the loan will be repaid if the borrower defaults on the car loan.
Guarantor car loans are often geared at people who might otherwise struggle being accepted for a secured car loan when purchasing a vehicle. Some of the reasons might include a lack of credit history such as with a student or young person, if there’s bad credit, or age as a factor such as with pensioners.
What is a loan term?
The loan term is the amount of time the lender gives you to repay the car loan. For example, if you take out a $20,000 car loan with a five-year loan term, you would be expected to pay off the entire $20,000 (plus interest) within five years.
What is a guarantor on a car loan?
A guarantor on a car loan is a third party, usually a relative or friend, who guarantees to meet the repayments of a loan for the purchase of a car, if the borrower/owner of the car defaults on the loan.
Guarantor car loans can be useful for people who would otherwise struggle in being accepted for credit to purchase a vehicle. These may include people with bad credit, students and young people who may have no credit history, as well as some pensioners.
Many lenders offer guarantor car loans, guarantor personal loans and guarantor home loans, because of the significantly reduced risk to the lender.
Can I get a discounted student car loan?
Being a student is tough enough, and while you might find the odd student discount on movies and technology, the same can’t be said about car loans, as you can’t really get a discounted student car loan.
Lenders make money on the interest and fees that they charge with loans, and the lowest interest and fees are given to the most reliable credit holders: people with excellent credit history.
As a student, you are unlikely to have enough on your credit report to warrant an excellent history. There are however, ways of getting a lower interest car loan if you can’t get an interest-free loan from the bank of mum and dad. One way of doing this may be through getting a guarantor car loan, which can get you a secured car loan by setting your parents up as guarantors.
Georgia Brown is a journalist and content writer for RateCity. Before venturing into the world of personal finance, she worked as a reporter for realestate.com.au and Smart Property Investment. She now works truly amongst personal finance, while also writing about other areas, such as sustainable finance and super.