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Learn more about car loans

How do I search for a car loan?

Whether you're looking to upgrade your car to a newer model, need to upsize to fit your growing family, or you're finally going to treat yourself to the car of your dreams, no two borrowers' needs will be exactly the same. That's why it's so important to know how to find the right car loan for your unique circumstances.

RateCity's interactive car loan rate table allows you to narrow down your search results according to the features that are most important to you.

Use the filters to search for specific lenders, select a security type and/or rate type, and apply any other filters that may be relevant to you. Next, input your preferred borrow amount, ideal loan term and whether you want to buy a new car or a used car.

You can also sort the results by advertised rate or comparison rate, in order to find the most competitive options that suit your needs. 

Once you have made a shortlist of your preferred loan products, be sure to compare all of the features, fees and other relevant factors before making a decision. Also consider reading the product disclosure statement before submitting a loan application.

Why is it important to compare car loan options?

Comparing car loan options can give you a better chance of choosing the right car loan for you. Without shopping around, there's a good chance you're limiting your options which could mean missing out on certain car loan features that could benefit you.

It might seem like an easy choice to take on the car finance that's offered to you at the car dealership, but doing so without making a comprehensive comparison of other loans on the market could potentially mean you're short changing yourself.

Even if the interest rate is competitive - which can generally be a positive start - there's still a number of other factors to consider when making your comparison.

What should I consider when searching for a car loan?

Interest rates

The first step for many is to compare interest rates. There are two parts to a car loan interest rate: the advertised rate and the comparison rate. The advertised rate is just the interest rate you pay on the loan, while the comparison rate combines the advertised rate and the main fees, including any upfront and ongoing fees. Consider taking different advertised rates and different comparison rates into account when making car loan comparisons.

Fees and charges

Car loan fees and charges can have a big impact on the overall cost of the loan, meaning the loan with the lower interest rate won't necessarily always be the more cost-effective option. Fees typically include the following:

  • Application fees, also known as upfront fees
  • Establishment fees
  • Account-keeping fees, such as monthly fees or ongoing fees
  • Early repayment fees
  • Extra repayment fees
  • Early exit fees
  • Redraw fees

Features

Features offered by different car loan products can vary, and some lenders may charge borrowers extra fees to access certain features. Consider comparing all available features to ensure your preferred product is right for you. These could include:

  • Fixed or variable: You will need choose between a fixed interest rate or variable rate for your new car loan. There can be benefits and disadvantages to both options, so be sure to weigh these up before making your decision.
  • Extra repayments: Some products will allow for extra repayments in addition to your regular fortnightly or monthly repayments. This feature can be helpful if you want to pay your loan off faster and potentially minimise interest costs. However, there can be a limit on extra repayments.
  • Redraw facility: If you are interested in having the option to make extra repayments, you may also be interested in finding a loan with a redraw facility. A redraw facility enables you to redraw any additional payments you have made on your loan, which can come in handy if you need to access some extra cash down the track. Be aware that there can also be a limit to how much you can redraw, as well as a fee charged each time you redraw.

Loan term

The loan term is the length of time you have to pay off your loan. Car loan terms most commonly range between one and five years, but some lenders may offer more flexibility. Ultimately, it's important to choose a car loan that you can repay comfortably, over a period of time that suits your needs. Consider using RateCity's Car Loan Calculator to get an estimate of how much your car loan repayments might cost on different terms.

Loan type

You will also need to choose between a secured car loan and an unsecured car loan. Lenders will typically charge higher interest rates for unsecured loans because they regard them as riskier than secured car loans.

How can I find the best car loan on RateCity?

Finding the best car loan for your needs doesn't have to take a huge amount of time and energy. RateCity's Real Time Ratings can minimise the legwork that might normally be required to find the top financial products.

Real Time Ratings is a rating system that ranks car loan products based on your individual lending requirements. It gives each product a score out of five stars, formulated on loan costs and flexibility.

To keep things simple when it comes to finding the right car loan for you, Real Time Ratings provides up-to-date results that are calculated as you use the site.

For information specific to your personal financial situation, consider reaching out to a financial advisor.