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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 - Secured Car Loan | |
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* | 6.86% p.a. - 15.44% 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. |
Liberty Financial - 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 or Unsecured Car Loan | |
Interest rate | 6.57% p.a. - 18.99% p.a. |
Comparison rate* | 7.19% p.a. - 21.78% p.a. |
Westpac - Secured Car Loan | |
Interest rate | 5.99% p.a. - 12.99% p.a. |
Comparison rate* | 7.20% p.a. - 14.14% p.a. |
Loans.com.au - Secured Car Loan | |
Interest rate | 6.09% p.a. - 12.79% p.a. |
Comparison rate* | 7.21% p.a. - 13.90% p.a. |
St.George - Secured Car Loan | |
Interest rate | 6.49% p.a. - 12.99% p.a. |
Comparison rate* | 7.61% p.a. - 14.06% p.a. |
BankSA - Secured Car Loan | |
Interest rate | 6.49% p.a. - 12.99% p.a. |
Comparison rate* | 7.61% p.a. - 14.06% p.a. |
Bank of Melbourne - Secured Car Loan | |
Interest rate | 6.49% p.a. - 12.99% p.a. |
Comparison rate* | 7.61% p.a. - 14.06% p.a. |
Commbank - Secured Personal Loan | |
Interest rate | 6.49% p.a. - 12.99% p.a. |
Comparison rate* | 7.90% p.a. - 14.34% p.a. |
Macquarie Bank - Secured Car Loan | |
Interest rate | 6.99% p.a. - 9.65% p.a. |
Comparison rate* | 7.97% p.a. - 10.62% p.a. |
NRMA - Secured Car Loan | |
Interest rate | 7.29% p.a. - 17.19% p.a. |
Comparison rate* | 8.00% p.a. - 17.97% p.a. |
RACV - Secured Car Loan | |
Interest rate | 7.29% p.a. - 17.19% p.a. |
Comparison rate* | 8.00% p.a. - 17.97% p.a. |
Plenti - Secured Car Loan | |
Interest rate | 7.49% p.a. - 12.99% p.a. |
Comparison rate* | 8.05% p.a. - 13.08% 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 | 9.09% p.a. - 17.24% p.a. |
Comparison rate* | 10.62% p.a. - 16.77% p.a. |
Latitude Financial - Secured or Unsecured 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 - Secured Car Loan | 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. | 6.86% p.a. - 15.44% p.a. |
Moneyplace - Secured Car Loan | 6.52% p.a. - 19.19% p.a. | 6.95% p.a. - 20.77% p.a. |
Liberty Financial - Secured Car Loan | 6.52% p.a. - 19.19% p.a. | 6.95% p.a. - 20.77% p.a. |
OMM - Secured or Unsecured Car Loan | 6.57% p.a. - 18.99% p.a. | 7.19% p.a. - 21.78% p.a. |
Westpac - Secured Car Loan | 5.99% p.a. - 12.99% p.a. | 7.20% p.a. - 14.14% p.a. |
Loans.com.au - Secured Car Loan | 6.09% p.a. - 12.79% p.a. | 7.21% p.a. - 13.90% p.a. |
St.George - Secured Car Loan | 6.49% p.a. - 12.99% p.a. | 7.61% p.a. - 14.06% p.a. |
BankSA - Secured Car Loan | 6.49% p.a. - 12.99% p.a. | 7.61% p.a. - 14.06% p.a. |
Bank of Melbourne - Secured Car Loan | 6.49% p.a. - 12.99% p.a. | 7.61% p.a. - 14.06% p.a. |
Commbank - Secured Personal Loan | 6.49% p.a. - 12.99% p.a. | 7.90% p.a. - 14.34% p.a. |
Macquarie Bank - Secured Car Loan | 6.99% p.a. - 9.65% p.a. | 7.97% p.a. - 10.62% p.a. |
NRMA - Secured Car Loan | 7.29% p.a. - 17.19% p.a. | 8.00% p.a. - 17.97% p.a. |
RACV - Secured Car Loan | 7.29% p.a. - 17.19% p.a. | 8.00% p.a. - 17.97% p.a. |
Plenti - Secured Car Loan | 7.49% p.a. - 12.99% p.a. | 8.05% p.a. - 13.08% 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 | 9.09% p.a. - 17.24% p.a. | 10.62% p.a. - 16.77% p.a. |
Latitude Financial - Secured or Unsecured Car Loan | 9.49% p.a. - 29.99% p.a. | 10.93% p.a. - 31.83% p.a. |
More in our secured car loans guide:
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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.com.au 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.
Security required | |
---|---|
Secured car loan | The car being financed |
Unsecured car loan | None |
Loan term | |
Secured car loan | 1-7 years |
Unsecured car loan | 1-7 years |
Interest rates | |
Secured car loan | Starting from 6-7% |
Unsecured car loan | Starting from 7-8% |
Loan purpose | |
Secured car loan | Vehicle purchase only typically |
Unsecured car loan | Any purpose (could also cover related costs like insurance) |
Type of interest rate | |
Secured car loan | Usually fixed |
Unsecured car loan | Fixed or variable |
Fees | |
Secured car loan | Generally lower |
Unsecured car loan | Generally higher |
Age of vehicles eligible | |
Secured car loan | Up to 12 years old |
Unsecured car loan | Any age |
Balloon payment available? | |
Secured car loan | Yes |
Unsecured car loan | Yes |
Comprehensive car insurance required | |
Secured car loan | Yes, generally |
Unsecured car loan | No |
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 available? | 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.com.au of the products on our database found that 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.
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, Money.com.au founder and loans expert
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.
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:
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.
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.
Secured car loans can include up-front and ongoing fees. These will be reflected in the comparison rate on the finance.
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.
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.
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GET STARTEDGET STARTEDIt'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.
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.
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.
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.
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.
Car Loans guides and resources
Where to next? Read our other car loan guides to understand more about your options for financing your next car.