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Compare low interest car loans across Australia

Find low interest car loans and save money on interest charges. View interest rates and calculate repayments on a variety of car loan products.

80+ car loan providers in RateCity’s database

200+ car loan products in RateCity’s database

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How do I get a low interest car loan?

To get the lowest possible interest rate on your car loan, you’ll need to prove that you’re a relatively safe risk for the lender.

You may be able to boost a lender’s confidence if you:

Keep in mind that the car loan with the lowest rate may not always be the best car loan to suit your financial situation. 

What is a low car loan interest rate?

A low interest car loan is a car finance product that offers borrowers a lower-than-average interest rate. Interest is what lenders charge customers for borrowing money. The amount of interest charged on loan products is calculated as a percentage of the amount borrowed – the interest rate.

Taking out a low interest car loan will typically mean paying less in interest charges on your loan amount over the life of the loan. At the end of October 2023, the average Australian car loan minimum interest rate on RateCity's database was 7.95%.

Keep in mind that you will often need to pay fees on your car loan as well as interest, so it’s important to factor these into your calculations. The comparison rate could help you get a better idea of a loan’s total cost.

Remember that the interest rate advertised by a lender may not be the interest rate you’ll pay on your car loan. The rate a lender will charge you may vary depending on a range of factors, such as your credit score, your income, and other elements of the lending criteria.

Additionally, the type of car loan you choose could affect the interest you pay:

  • Secured car loans tend to have lower interest rates than unsecured car loans, as they are guaranteed by the value of the vehicle.
  • Unsecured car loans tend to have higher interest rates than secured car loans, though they may have fewer restrictions on the type or age of vehicle you can buy.
  • Fixed rate car loans will have you paying the same fixed interest rate for the duration of your loan term, for simpler budgeting, though they may offer less flexibility.
  • Variable rate car loans may have their interest rate increase or decrease during your loan term, which could affect your monthly repayments.

Why aren't all car loans low interest?

The interest rate on a car loan, like with personal loans and other finance products, will typically vary from one lender to the next. Additionally, the interest rate available to one borrower may not be offered to another.

This may be due to:

  • Varying overheads: Some online-only lenders have fewer overheads, and can use the money saved to lower their interest rates.
  • Borrower’s credit rating:A borrower with an excellent credit score will often be offered a more competitive rate than a borrower with a less desirable credit score, as they are seen to be less of a risk. This means low interest car loans are often reserved for borrowers with excellent credit.
  • Differing fee structures: Some lenders may offer lower interest rates but have higher fees, while other lenders may charge higher interest rates but have lower fees. Car loan fees may include upfront or establishment fees, as well as ongoing fees. On the other hand, some lenders charge no fees at all on their car loans.

How do I reduce the interest on my car loan?

If one of the reasons you’re looking for a car loan with a low interest rate is to avoid paying a lender too much more on top of your car’s value, there are several options you could consider.

By making additional repayments and getting ahead on your car loan, you’ll be bringing yourself closer to getting your loan fully paid off ahead of schedule. Making an early exit from a loan can reduce the total interest you’ll be charged over the lifetime of your loan, saving you money.

However, this may not be a valid option for every low-interest car loan. Some lenders charge fees for making additional repayments or for paying off a car loan ahead of schedule, to help make up for the interest payments they’d be missing out on.

Fixed-rate loans tend to carry more restrictions, often locking borrowers into tight repayment plans, without the option for extra repayments. Variable rate car loans tend to have more flexible repayment options, though some lenders do still charge fees for making extra repayments. Make sure you’re familiar with the car loan’s terms and conditions before signing on.

If your low-interest car loan allows you to easily make extra repayments, there’s sometimes an added benefit beyond just bringing you closer to the end of the loan early. If your car loan also includes a ‘redraw facility’, you’ll be able to claim back (or redraw) the extra money you’ve paid into your car loan if required.

As well as adding extra flexibility to your car loan, a redraw facility can help you make those extra repayments with confidence – you’ll be able to get ahead on your loan without locking up your spare cash in a loan where it can’t be easily accessed.

Please note that redraw facilities often come with conditions attached. For example, you might have to pay a fee every time you redraw money. Also, there might be limits on how much you can withdraw within a certain time period.

How much will a low interest car loan cost you?

Compare and save using our Car Loan Calculator

Calculate what your repayments could be on your car loan.


Can anyone get a low-rate car loan?

If you’re on the hunt for a low rate on your car loan, it’s worth considering how your credit history and credit score may play a role. 

When a vehicle finance provider assesses your loan application, they will perform a hard credit inquiry into your credit history to calculate your creditworthiness. Put simply, they are examining the level of risk you pose as a borrower and the chance that you may default on your loan.

The higher your credit score, the less likely you are to default on your loan, and the more competitive the interest rate you may be offered. There are, of course, other eligibility criteria you will need to fulfil, but by having an excellent credit score, you will generally increase your chances of qualifying for a lender’s lower rates.  

Struggling with a below average or just average credit score? Or do you have bad credit? There are a few ways you may be able to boost your credit score today.

Which banks offer the lowest rate car loans?

A variety of Australian banks and non-bank lenders offer low-rate car loans, including:

How do I find a low interest car loan?

It’s often worth looking for a car loan with a low interest rate, so you can pay less from month to month and over the lifetime of the loan.

It’s also worth comparing the other features offered by a low-interest car loan, to make sure you’re getting a deal that’s right for you. When you also look at a low-interest car loan’s fees and features, you might find that the cheapest loan isn’t always the best.

Comparison tables

At RateCity, you can find a wide range of car loans available from a variety of lenders. Using filters, you can narrow the selection down to a shortlist of just the car loans that best suit your needs, sorted by the lowest advertised interest rates and comparison rates.

Remember that a low interest rate shouldn’t be all you look for in your car loan – take a closer look at the features and benefits different lenders offer to work out which car loan will provide the most value for your financial situation.


RateCity’s Car Loan Calculators allow you to enter the details of your preferred car loan to work out the repayments, so you can better prepare your household budget. You can then compare car loan options that may fit your results.

Real Time Ratings™

RateCity’s Real Time Ratings™ combine the cost and flexibility of a loan into a single star rating. These ratings are updated every day to help provide an accurate indication of their overall value. You can compare some of the top-rated car loans in a variety of categories on our Car Loan Leaderboards, and search for the gold badges of RateCity Award winners.

What is a car loan comparison rate?

When searching for low-interest car loans, remember that the advertised interest rate might be different from the ‘real’ rate you pay. That’s because car loans can become significantly more expensive once you include the cost of fees. You might discover that some low-interest car loans aren’t as cheap as they initially seem, while some car loans with higher advertised rates but lower fees might work out costing you less over the life of the loan.

It’s worth looking at each loan’s ‘comparison rate’, which combines the advertised interest rate with any standard fees. But remember that for consistency, comparison rates are calculated on a car loan of $30,000 over five years –it might be slightly inaccurate if your loan is different.

Also, a car loan’s comparison rate only summarises its standard fees and charges, and may leave out other costs. Plus, the comparison rate doesn’t account for any extra features and benefits that could influence your decision, so be sure to do a little research before settling on a low interest car loan.

Where can I look for a low-rate car loan?

Car loan interest rates are always fluctuating, but there are a range of car loan lenders offering interest rates below 10%. Whether or not a borrower will qualify for the lowest rates on offer will depend on a range of factors, including their income and expenses, their credit score, and the lender’s eligibility criteria. 

If you’re looking for a competitive interest rate, you may want to consider:

  • Competitor lenders: Online lenders and smaller competitors may offer more competitive interest rates than some of the leading banks. This is because traditional brick-and-mortar lenders typically have higher overheads than smaller lenders, who can then pass on these savings to their customers as lower rates and fees.
  • New vehicles: Some lenders offer lower interest rates for new car loans than for used car loans. This is because there is less risk a new vehicle will break down during the car loan term than a used vehicle.
  • Secured car loans: By securing your loan with the value of the car you’re buying, there is less risk of the lender losing money if you were to default on your repayments. This extra confidence means a lender is more likely to offer a lower car loan interest rate.
  • Refinancing: If your personal financial situation has changed, you could consider refinancing your car loan. This involves switching from one car loan to another, often one with a lower interest rate. Keep in mind that if your refinance extends your loan term, you may end up paying more interest on your car in total.

Remember that your car loan won't be the only ongoing vehicle cost you'll need to budget for. There's also petrol, car servicing, car registration and car insurance to consider. 

This article was reviewed by Personal Finance Editor Georgia Brown before it was published as part of RateCity's Fact Check process.

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, target market determination fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.