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Melbourne car loans

In 2016 the Economist Intelligence Unit dubbed Melbourne the world’s most liveable city. This was the sixth year in a row, so it’s not surprising that Melburnians are pretty pleased with the results. Often described as the cultural capital of Australia, there is plenty to see and do in the city and the surrounding areas. If you have your own transport, you and all the family can take in the museums, galleries and theatre shows of your choice, or take trips to the mountains or the beaches to make the most of your leisure time.

How do car loans in Melbourne work?

As in other Australian cities, the personal loans market in Melbourne is competitive, keeping interest rates low. You can apply for a car loan via a wide range of financial institutions, plus there are also online companies that handle loan queries from their potential customers remotely.

Depending on your status and personal preferences, you can apply for a Melbourne car loan that is secured, for example on your car, home or other property. This can be a slightly cheaper option compared to seeking out an unsecured loan.

A pre-approved car loan will enable you to arrange finance before choosing your vehicle, which is very useful if you haven't quite made up your mind yet. Be prepared to have your credit history checked, and to negotiate with your lender if you want to make adjustments to your car loan’s terms.

What are the main features of car loans in Melbourne?

Lenders offer a range of different types of car loans at fixed or variable interest rates. They may also suggest features such as flexible repayments, arrange balloon payments, or choose loans with particularly low interest rates. If you happen to be a pensioner, single parent or student, you may find that some companies will have special deals tailored to your level of income.

A flexible payment system allows you to make more than the minimum payment from time to time. This means you might be able to repay your loan early, however, sometimes lenders place a restriction on how often you can do this, or charge additional fees when you do.

A balloon payment system means you can make smaller regular repayments and a much larger one at the end of the loan period. Alternatively, you can often refinance your vehicle to repay the final instalment.

What are the pros and cons?

To get a better deal, 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.