Choosing a Car Loan in Australia
There are many ways to finance a car, whether you need one for family, work, or personal needs. What follows are Ezilend’s financing suggestions and tips for making the process stress-free.
Types of Car Loans
Car finance options fall into the following classifications:
- Variable: A variable interest rate can change throughout the life of the loan, meaning monthly payments can fluctuate based on the market.
- Fixed: These loans come with a rate that stays fixed throughout the loan tenure.
- Unsecured: Lenders offer loans where no asset or security is required to obtain a loan. These instruments usually have a higher interest rate.
- Secured: Lenders may provide loans where your car is the loan’s security. Default payments give the lender permission to take the car.
- Hire purchases: The loan term comes with the understanding that the car belongs to the bank.
- Business/Chattel: These loans are for businesses that use vehicles for business purposes.
- Novated leasing: An employee, their employer, and a car loan company support the employer’s car financing. The employer takes a portion of the employee’s salary to pay the vehicle off.
Financing a Car in Australia
You’ll have to research, study, and compare. Or use a finance broker who knows the market and can do the research for you! The best way to circumvent the decision-making is to partner with a reputable company like Ezilend. Whether a first-time buyer or a seasoned car owner, we make the loan process simple and personal. Here’s how.
Understanding the Basics
Ezilend ensures every hopeful car buyer knows the components for selecting the right loan. They include:
- Type of loan
- Interest rates
- How to compare
- Loan periods and how they impact interest repayments
- Choosing a lender
- Term conditions
- Upfront fees
- Monthly fees
- Ongoing fees
- Break fees
- Missed payments and defaulting on fees
- Late payment fees
- Discharge fees
- Miscellaneous costs
- Stamp duty
- Running costs (maintenance, servicing, petrol, etc.)
Comparing Loans Using the Right Parameters
You also want to track your credit score. Creditworthiness impacts interest rates and loan amounts.
Know the Requirements for Financing
The above tips are a great way to understand loan types. You’re now ready to review the eligibility criteria. You must:
- Have a valid driver’s license
- Be at least 18 years of age
- Have a minimum 100 points of ID across your license, passport, Medicare card, etc.
- Vehicle details
- Brand and model
- Status (new or used)
- Engine and registration number
- Purchase price
- Have a regular income or incoming pension (Centrelink is a recognised secondary income)
- Proof of earnings
- Three recent payslips or 90 days of bank statements
- Employer information
- If self-employed, you’ll need tax returns, and
- Details of your assets and liabilities.
Determine Your Repayments
Use a car finance calculator to determine how you’d repay the loan. Input the amount that needs borrowing, years on the loan term, repayment frequency, and interest rates.
Apply for Your Car Loan Pre-Approval
If you are considering buying a new car, then you can apply for pre-approval to get a clear idea of your financing options from the experts! Ezilend can help with applications and answering questions.
Ezilend is a specialised car loan consultant. We use a network of lenders to find Australia’s lowest interest rates and best terms. Have you been knocked back before? Give our team a go. Whether you’re getting a preowned or new car, we will find you the best deal on your finance.