Give as much attention to choosing your car loan as you did when you chose your car. Compare your options to find the best loan.
Not all car loans are created equal, which makes it all-the-more important to start your road to finance with comparing your options. But what should you be looking for, and where should you start? In the guide below we'll show you how to compare car loans to ensure you find the right car loan for your needs and situation.
Car Loan Offer
Apply for a CUA Fixed Rate Car Loan and enjoy a great low interest rate with no ongoing fee.
- Interest Rate From: 6.79% p.a.
- Comparison Rate: 6.92% p.a.
- Interest Rate Type: Fixed
- Application Fee: $0
- Minimum Loan Term: 1 year
- Maximum Loan Term: 7 year
- Minimum Loan Amount: $15,000
- Maximum Loan Amount: $100,000
Compare your car loan options below
How to use the table below to compare
- Loan amount. Enter how much you're looking to borrow.
- Loan term. Enter how long you want the loan terms to be (you can adjust this after)
- Calculate. Click calculate and the loans below will adjust the monthly repayment amount based on the details you provided. You can the compare your options based on the loan's affordability.
How do car loans work?
A car loan is a personal loan that is specifically designed to finance a vehicle purchase. These loans require you to attach your newly-purchased car as security which the lender can sell in case you default on the loan. As this means the loan is less of a risk to the lender, these loans usually come with a lower interest rate or lower fees.
Lenders who offer car loans usually place some restrictions on the car you are able to purchase. This is because the lender has to ensure the car is in a good enough condition that they will be able to sell it and recoup their losses should you default on the loan. Most lenders will only allow you to purchase a new or used car that’s less than seven years old.
Your car loan comparison guide
Car loans come with a range of features that you can use as a basis for your comparison. Here’s what to look out for when comparing your car loan options:
- The cost of the loan
There are two considerations here – interest rate and fees. When comparing interest rates, decide whether fixed or variable rates will work better for you. While fixed rates can help with budgeting and allow you to lock in a competitive rate, variable rate loans allow you increased repayment flexibility.
With any loan, remember to take fees into account. This includes upfront fees such as establishment fees as well as ongoing fees such as monthly and annual fees. The comparison table above will give you an idea of your monthly repayments when you enter your loan amount and expected terms into the calculator at the top, and this includes all upfront and ongoing fees.
- The restrictions that apply
Car loans tend to come with restrictions, so check the terms of the loan before submitting your application. The first thing to check is whether your car is eligible. If it's a new car loan your car will need to be brand new or usually less than two years old. If it's a used car loan the age limit differs, but it can be anywhere from five to ten years.
You should also check the restrictions that apply in terms of the way you can use your loan amount. For instance, can you only use it to purchase the vehicle or can you also use it to pay for additional costs? If you want to use the loan for separate purposes, such as to consolidate debt, you may need to consider an unsecured personal loan.
- Repayment flexibility
Most lenders will allow you to set your repayments as weekly, fortnightly or monthly so you can line them up to when you get paid. You may also have the option of making additional repayments that can help you reduce the cost of your loan and also pay your loan back early. Keep in mind that if you have a fixed rate loan you may be charged fees to be able to do this.
- Loan terms
This is the length of time that the lender sets for you to pay back your loan. The loan term will usually be between one and five years for a fixed rate loan and one and seven years for a variable rate loan. The less time you take to pay back the loan, the less you’ll pay in interest, but the higher your repayments will be. You have to find a balance of saving yourself money in interest but also being able to manage your repayments. If you're planning to pay back your loan early, check if you'll be able to without being charged a fee.
- Loan amount
How much you're able to borrow will usually be linked to the price of the car. Lenders will usually request details of the car when you're applying to verify the loan amount. If you haven't found your vehicle yet, you can consider applying for pre-approval so you know how much you have to work with.
How you can apply
If you have a good idea of how to find the right loan for you, you can compare your options using the table above. Once you’ve found a loan you’re interested in, click "Go to Site" to be directed to the lender’s website. Then you can fill out an online application form.
The eligibility criteria will differ between lenders, but generally you will need to be over the age of 18 and be in some form of employment. Most lenders will also require you to have a good credit rating, although some, including some in the table above, may lend to you with bad credit.