Can you pay off a secured car loan early?

It's generally possible to repay a secured car loan early by making extra repayments (although it's flat out not allowed on some loans). The thing to watch out for is any fees that may apply to extra repayments. Some lenders will also impose a charge if you repay the loan sooner than the end of the contracted term.

Can I sell my car if I have a secured loan?

This depends on the lender's rules but it may be possible, provided you use the proceeds of the car sale to pay out the loan (again, watch out for early repayments fees that could apply). It's a good idea to speak to your lender before you sell the car being used to secure your loan.

Can I refinance a secured car loan later on?

Yes it’s usually possible to refinance your car loan even if your car is secured against it. The lender you refinance with will simply pay out your old loan, and register your car as security on the new loan. Bear in mind you may be charged fees as part of the refinancing process.

Can I get pre-approval on a secured car loan?

Yes, most lenders offer car loan pre-approval for secured vehicle finance, up to a certain amount. However, because the loan will be secured by the car you buy, your finance won't be fully approved until the lender has checked that the vehicle you choose meets its eligibility criteria.

What credit score is needed for a secured loan?

There’s no minimum credit score that applies to all secured car loans. Each lender will have its credit rules. But a consistent theme is that you will generally be charged a higher interest rate if you have a lower credit score.

Australia's Best Secured Car Loans & Rates Comparison

Why compare secured car loans with Money

30+ Australian lenders to choose from

Personalised rates

No credit score impact

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Compare a selection of the best secured car loan interest rates in Australia, sorted by the lowest comparison rates).

	Harmoney - Secured Car Loan
Interest rate	5.66% p.a. - 20.07% p.a.
Comparison rate*	6.45% p.a. - 20.98% p.a.
	Now Finance - Car Loan (Secured)
Interest rate	6.75% p.a. - 21.65% p.a.
Comparison rate*	6.75% p.a. - 21.65% p.a.
	Great Southern Bank - Secured Fixed Car Loan
Interest rate	6.49% p.a. - 15.04% p.a.
Comparison rate*	6.95% p.a. - 15.54% p.a.
	Liberty Financial - Secured Personal Loan
Interest rate	6.52% p.a. - 19.19% p.a.
Comparison rate*	6.95% p.a. - 20.77% p.a.
	Moneyplace - Secured Car Loan
Interest rate	6.52% p.a. - 19.19% p.a.
Comparison rate*	6.95% p.a. - 20.77% p.a.
	OMM - Secured Vehicle Loan
Interest rate	6.57% p.a. - 18.99% p.a.
Comparison rate*	7.19% p.a. - 21.78% p.a.
	Loans.com.au - Secured Car Loan
Interest rate	6.09% p.a. - 12.99% p.a.
Comparison rate*	7.21% p.a. - 14.10% p.a.
	Bank of Melbourne - Secured Fixed Rate Loan
Interest rate	6.49% p.a. - 12.99% p.a.
Comparison rate*	7.61% p.a. - 14.06% p.a.
	BankSA - Secured Fixed Rate Loan
Interest rate	6.49% p.a. - 12.99% p.a.
Comparison rate*	7.61% p.a. - 14.06% p.a.
	St.George - Secured Fixed Rate Loan
Interest rate	6.49% p.a. - 12.99% p.a.
Comparison rate*	7.61% p.a. - 14.06% p.a.
	Westpac - Car Rate Loan
Interest rate	6.49% p.a. - 12.99% p.a.
Comparison rate*	7.69% p.a. - 14.14% p.a.
	Plenti - Secured Car Loan
Interest rate	7.19% p.a. - 12.99% p.a.
Comparison rate*	7.82% p.a. - 13.66% p.a.
	NRMA - Secured Personal Loan
Interest rate	7.29% p.a. - 16.99% p.a.
Comparison rate*	8.00% p.a. - 17.77% p.a.
	RACV - Secured Personal Loan
Interest rate	7.29% p.a. - 16.99% p.a.
Comparison rate*	8.00% p.a. - 17.77% p.a.
	Commbank - Secured Personal Loan
Interest rate	6.99% p.a. - 10.99% p.a.
Comparison rate*	8.04% p.a. - 11.99% p.a.
	Society One - Secured Car Loan
Interest rate	8.20% p.a. - 24.89% p.a.
Comparison rate*	8.27% p.a. - 25.64% p.a.
	Wisr - Secured Car Loan
Interest rate	8.59% p.a. - 15.49% p.a.
Comparison rate*	10.12% p.a. - 17.03% p.a.
	Latitude Financial - Secured Car Loan
Interest rate	9.49% p.a. - 29.99% p.a.
Comparison rate*	10.93% p.a. - 31.83% p.a.

	Interest rate	Comparison rate*
Harmoney - Secured Car Loan	5.66% p.a. - 20.07% p.a.	6.45% p.a. - 20.98% p.a.
Now Finance - Car Loan (Secured)	6.75% p.a. - 21.65% p.a.	6.75% p.a. - 21.65% p.a.
Great Southern Bank - Secured Fixed Car Loan	6.49% p.a. - 15.04% p.a.	6.95% p.a. - 15.54% p.a.
Liberty Financial - Secured Personal Loan	6.52% p.a. - 19.19% p.a.	6.95% p.a. - 20.77% p.a.
Moneyplace - Secured Car Loan	6.52% p.a. - 19.19% p.a.	6.95% p.a. - 20.77% p.a.
OMM - Secured Vehicle Loan	6.57% p.a. - 18.99% p.a.	7.19% p.a. - 21.78% p.a.
Loans.com.au - Secured Car Loan	6.09% p.a. - 12.99% p.a.	7.21% p.a. - 14.10% p.a.
Bank of Melbourne - Secured Fixed Rate Loan	6.49% p.a. - 12.99% p.a.	7.61% p.a. - 14.06% p.a.
BankSA - Secured Fixed Rate Loan	6.49% p.a. - 12.99% p.a.	7.61% p.a. - 14.06% p.a.
St.George - Secured Fixed Rate Loan	6.49% p.a. - 12.99% p.a.	7.61% p.a. - 14.06% p.a.
Westpac - Car Rate Loan	6.49% p.a. - 12.99% p.a.	7.69% p.a. - 14.14% p.a.
Plenti - Secured Car Loan	7.19% p.a. - 12.99% p.a.	7.82% p.a. - 13.66% p.a.
NRMA - Secured Personal Loan	7.29% p.a. - 16.99% p.a.	8.00% p.a. - 17.77% p.a.
RACV - Secured Personal Loan	7.29% p.a. - 16.99% p.a.	8.00% p.a. - 17.77% p.a.
Commbank - Secured Personal Loan	6.99% p.a. - 10.99% p.a.	8.04% p.a. - 11.99% p.a.
Society One - Secured Car Loan	8.20% p.a. - 24.89% p.a.	8.27% p.a. - 25.64% p.a.
Wisr - Secured Car Loan	8.59% p.a. - 15.49% p.a.	10.12% p.a. - 17.03% p.a.
Latitude Financial - Secured Car Loan	9.49% p.a. - 29.99% p.a.	10.93% p.a. - 31.83% p.a.

Secured car loan rate comparison based on products analysed by Money.com.au advertising a high and low interest rate range. The table is sorted by the lowest ‘starting from’ comparison rate. Rates are current as of 1 July 2024. Check with the provider for full current loan details, including rates, fees, eligibility criteria and terms and conditions. While this is an extensive list of secured car loans available in Australia, not all loans in the market are shown. This list of secured car loan interest rates is for reference only and does not reflect the selection of loans you may see if you get a personalised quote through Money.com.au. *Comparison rate examples shown are per the lenders’ websites, based on a $30,000 secured loan over 5 years. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates.

Secured car finance in Australia: How it works

A secured car loan is a fixed-term and usually fixed-rate secured personal loan used to purchase a vehicle. With a secured car loan, the vehicle you buy acts as collateral (security) for the loan.

This is the most common way to finance a car in Australia and generally works out cheaper for the borrower compared to an unsecured loan.

This is because there's less risk for the lender. If you can’t repay a secured car loan, your lender has the right to reclaim the car to recoup its money.

Most car finance you’ll see advertised is for a secured car loan, but it’s not always the case. For example, analysis by Money found that several major lenders in Australia only offer unsecured car finance, including ANZ, NAB and ING.

Secured car loans work similarly to other finance options, but there are some key differences to understand.

	Secured car loan	Unsecured car loan
Security required	The car being financed	None
Loan term	1-7 years	1-7 years
Interest rates	Starting from 6-7%	Starting from 7-8%
Loan purpose	Vehicle purchase only typically	Any purpose (could also cover related costs like insurance)
Type of interest rate	Usually fixed	Fixed or variable
Fees	Generally lower	Generally higher
Age of vehicles eligible	Up to 12 years old	Any age
Balloon payment option?	Yes	Yes
Comprehensive car insurance required	Yes, generally	No

Broadly speaking, if you’re buying a car, a secured car loan is generally going to work out cheaper than using unsecured finance.

That’s because secured car loan interest rates are usually lower.

Analysis by Money of the products on our database found secured loans have an average (median) interest rate of 12.50% p.a., whereas for unsecured personal loans the equivalent figure is 15.36% p.a.

Put simply, the security (the car) removes risk for the lender. So they chip a bit off the interest rate. This is often also reflected in lower fees on secured car loans.

It may also be easier to be approved for a secured car loan due to the increased protection for the lender.

You get flexibility, too, as it's possible to get a secured car loan for most used as well as new cars.

What are the disadvantages of a secured car loan?

Shaun McGowan, Loans Expert

With a secured car loan, the lender maintains an interest in your vehicle during the finance term. This means that in the unlikely event you can't repay the loan, the car could be repossessed. There can also be more paperwork with a secured loan. The lender will want details about the car before it approves the loan, and proof that it will be covered by comprehensive car insurance. But these extra steps reduce risk for the lender and in return the borrower typically saves money.

Shaun McGowan, Loans Expert

What car can I buy with a secured car loan?

Generally, you can finance new and used cars up to 12 years old with a secured car loan.

That said, some lenders have a lower maximum age than this. Some also charge higher interest rates the older the car is. The car can usually either be purchased from a dealer or through a private sale.

It’s possible to finance a commercial vehicle using a secured business car loan.

Even other vehicle types such as caravans and motorcycles can be eligible for secured finance.

Common restrictions on secured car loans

Grey imports

Most lenders will not offer secured car finance on “grey imports” (Nissan Skylines are a common example). These are vehicles that were imported as a used vehicle, and were not originally sold by the manufacturer in Australia.

Negative PPSR reports

Vehicles with negative reports on the Personal Property Securities Register (PPSR) are also typically not eligible for a secured car loan. This may include the vehicle being reported stolen, written off, or having an incorrect odometer reading.

You can generally borrow a maximum of 100% of the car's value with a secured car loan. Your loan cannot be used to finance related costs.

Your eligibility for a secured car loan will depend on how much you wish to borrow, the age and type of vehicle you’re buying, and your financial situation.

When it comes to the last point, lenders generally look for:

A clean credit history (or in other words a high credit score)

Borrowers who have been in regular, stable employment for at least two years

Someone who can demonstrate financial responsibility (they’ll look at your bank statements for this).

BUT secured car loans can also be options for people who can’t tick all of these boxes.

Like people with bad credit (through a bad credit car loan).

Or self employed people who don’t have a regular income (through what’s called a ‘low doc car loan’).

Remember, you can apply for car loan pre-approval to check how much you are eligible to borrow from a lender before you go car shopping.

1

Look for the lowest rate

Secured car loan rates tend to be cheaper than other forms of finance, but the rates available can still vary massively between lenders. Shop around.

2

Minimise fees

Secured car loans can include up-front and ongoing fees. These will be reflected in the comparison rate on the finance.

3

Choose the shortest loan term you can afford

The same secured car loan repaid over four years will cost you less overall than if you repaid it in five years, but the regular repayments will be higher.

4

Find flexible features

Ideally look for a secured car loan with the option to make extra repayments and repay it early without penalty. A redraw facility will mean you can access extra money you've repaid if you need it.