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Written byShaun McGowan
A secured car loan is a fixed-term, fixed-rate, secured personal loan used to purchase a vehicle.
Security on a car loan should mean lower interest rates than a typical loan..
Secured car loans can be arranged through a bank, car dealership, car finance broker or online.
If you’re buying a car, you’ll either get a secured car loan or an unsecured personal loan.
Secured car loans are generally considered better because:
Generally, you can finance new and used cars up to 7 years old with a secured car loan. Some lenders will work with older cars, but you may be asked to pay substantially higher rates.
Here are three common restrictions on secured car loans:
Qualifying depends on a few things:
If you want to get the best deal, lenders consider the ‘ideal’ person to:
Other factors like the interest rate and fees applied to your car loan will vary, depending on the lender, the age of the vehicle, and your personal credit profile. (For instance, if you have bad credit, you'll most likely pay a higher interest rate than someone who doesn't.)
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Shaun is the founder of Money.com.au and is determined to help people pay as little as possible for financial products. Through education and building world class technology. Previously Shaun co-founded CarLoans.com.au and Lend.
*Information about comparison rates Comparison rates are designed to allow borrowers to understand the true cost of a loan by taking into account fees and charges, the loan amount and the term of the loan. The comparison rate is based on an unsecured fixed rate personal loan of $30,000 over 5 years. WARNING: Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.