If you're in the market to upgrade your car or even to buy your first vehicle, you might be wondering what the right type of loan is for you. A variable rate loan offers you a flexible way to finance your new vehicle purchase. There are a few different type of variable loans to consider, both for new and used vehicles, and for secured and unsecured loans. Read more in our guide below.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
A variable rate car loan has a variable rate of interest, so your repayments may fluctuate if the market interest rates change. This means your interest rate may increase or decrease throughout the life of your loan.
However, as a result, your loan also comes with increased repayment flexibility when compared to fixed-rate loan.
What are the different types of car loans with a variable rate?
When it comes to car loans with variable rates, there are two main loan types:
Unsecured car loans. With unsecured car loans, the lender does not require a guarantee. In the event that you are unable to repay the loan, the lender does not have any right to take your assets. Interest rates tend to be higher on unsecured loans.
Secured car loans. This type of loan requires a vehicle as a guarantee in order to be approved for the loan. If you default on your repayments the lender has the right to sell the guaranteed asset in order to reclaim their losses.
Questions to ask when you compare variable rate car loans
Considering the following factors can help you compare your variable rate loan options and find the right one for you:
What interest rate will you be charged? Even though the rate is variable, looking at the rate that applies to the loan when you're comparing will give you an idea of the competitiveness of the product.
What fees comes with the loan? Look for upfront fees such as loan establishment fees as well as ongoing fees such as monthly and annual fees.
Can you make additional repayments? Variable rate loans tend to be more flexible in terms of allowing additional repayments, so check if you are able to make extra or lump sum repayments.
Can you repay the loan early without penalty? This is another common feature of variable rate loans; check if an early prepayment or early termination fee applies.
Symple Loans Personal Loan: 6.47% p.a. comparison rate. Apply for up to $50,000.
Things to be careful with variable car loans
When taking out a variable car loan try to avoid long term loans. The longer you stay paying out variable rate car loan, the higher the risk of the interest rates going up. If you do take out longer loan terms opt for a loan that does not charge you for early repayments.
If you are taking out a loan with a dealership, make sure that the interest rate isn’t higher than average. It is crucial to ensure you do a comparison before committing to anything with them. Ask the dealer about fees, charges, balloon payments and the comparison rate.
If your application for a car loan has been declined a by lender, it may be a good idea to wait a few months before applying again. More applications will look bad on your credit history. You can use the services of a car loan broker beforehand to maximise your chances of approval.
Questions you've asked about variable rate car loans
Where can I conduct a comparison of Australian car loans?
You can start your comparison of variable rate car loans on this page. You can also see our car loan comparison, we’ve also included a guide as to how to compare them. Remember to compare loans side by side to see how each one stacks up.
Can you refinance car loans?
Yes. To learn more about this process, have a read of our refinancing car loans guide. You can also refinance a balloon payment if your finance has this option. Keep in mind that this can mean you end up paying more in interest over the extended period of time.
Jeremy Cabral is the chief operating officer and global head of publishing for Finder. He has written hundreds of comparisons covering everything from credit cards to travel money to Netflix TV shows. Jeremy has a Bachelor of Business (Marketing) from the University of Western Sydney.
The Federal Court of Australia today dismissed proceedings brought by ASIC against Finder Wallet. The Judgment, handed down by Justice Markovic, ruled that Finder Earn was compliant with applicable consumer financial laws.
The Kia EV6 GT is a vehicle that marks a significant point in the evolution of the modern performance car, a nod to the future where speed and power coexist with sustainability and practicality.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Important information about this website
finder.com.au is one of Australia's leading comparison websites. We are committed to our readers and stands by our editorial principles
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labeling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
We make money by featuring products on our site. Compensation received from the providers featured on our site can influence which products we write about as well as where and how products appear on our page, but the order or placement of these products does not influence our assessment or opinions of them, nor is it an endorsement or recommendation for them.
Products marked as 'Top Pick', 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
Please read our website terms of use and privacy policy for more information about our services and our approach to privacy.
