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Minimum and maximum loan periods vary between 6 months and 10 years. Comparison
interest rates vary between 6.55% and 19.07% p.a. Total interest repayments vary between
$4,290 and $14,531 over the life of the loan. *Comparison rate is based on an unsecured loan
of $30,000 for a term of 5 years. WARNING: This comparison rate is true only for the
examples given and may not include all fees and charges. Different terms, fees or other loan
amounts might result in a different comparison rate. These rates can change without further
notice. All rates quoted are per annum. For more information regarding fees click on "View
fees & additional info +" for each product or contact the provider.
Find secured car loans and get a lower interest rate
If shopping for a new ride is next up on your to-do list, you might need some extra cash before you can hit the road. A secured car loan not only expands your budget, but it also keeps interest costs minimal. Read BestFind’s guide to find the best info on secured car loans in Australia.
What makes a car loan secured?
As far as personal loans are concerned, secured car loans can be a win-win for both Aussie borrowers and lenders. First, the lender is willing to offer a “strings attached” deal where they have security over the vehicle you want to purchase. Besides your new buy, collateral can also be any other assets you own, such as property, stocks, and savings accounts.
That means there’s no financial risk involved since the lender has a right to sell the asset and regain any losses if you fail to make repayments. By agreeing to this and in return, you get to buy your dream ride at a lower interest rate.
Secured vs unsecured car loans
Typically, lenders view unsecured car loans as the “riskier” counterparts to secured car loans. Here’s a quick breakdown of unsecured car loans and what to expect if you choose this option:
- No collateral. The borrowed money is not guaranteed against the car’s value. As a result, the lender can’t repossess the vehicle to recover their losses if you default.
- Higher interest rate. The lender faces a greater financial risk if they can’t get their hands on your ride when you fail to repay. They, therefore, use a higher interest rate as a counterbalance.
- More flexibility. With a secured loan, you borrow money that’s backed by collateral. Consequently, the amount is typically limited by the value of the asset used. However, unsecured loans have no such restrictions.
Are there any benefits to choosing a secured car loan?
Here are some significant advantages that come with a secured loan against car agreement:
- Lower interest rates. By hanging onto your ride when you default, the lender won’t lose much. For this reason, they’ll charge a favourable rate.
- Increased chance of approval. Due to less risk on the credit provider’s part, most borrowers are likely to get a nod when they apply. This goes for the self-employed, those with bad credit and others who can’t meet specific requirements.
- Applicable as long as the vehicle is in good condition. That means you can still take the second-hand route if brand-new doesn’t work for your budget.
The risks and disadvantages of securing your car loan
Secured car loans may offer lower interest rates, but what’s the catch?
- Greater risk for the borrower. If you slip up on your repayments, you risk losing the vehicle or your asset.
- Less flexibility. Generally, the amount you can borrow tends to be confined within the boundaries of the car’s value. Furthermore, some lenders only offer secured deals for specific vehicle models under a certain age.
How to pick the best secured car loan
When you browse BestFind’s comparison table above, you’ll find a range of secured car loans from many Australian lenders. Use the following factors to refine your search and nail down an option that satisfies your budget and needs:
- Borrowing costs. Compare the interest rate and comparison rate, which are displayed side by side in our product tables. While a low interest rate is superb, the comparison rate also shows the actual cost of your debt in terms of the interest rate plus other fees and charges.
- Fixed vs variable interest rate. A fixed rate means you won’t have to switch up your budget. But, while variable rates come with fluctuating rates, a dip in market rates will boost your savings.
- Loan amount and term. You can borrow as little as $1,000 or as much as $100,000. On the other hand, repayment periods vary between one and ten years. The goal is to find an offer that matches your preferred values for these two factors.
- Monthly repayments. Use BestFind’s secured car loan calculator to estimate your repayments. All you have to do is enter your amount and term, then click calculate.
- Other features. Depending on your objectives, check for secured car loans with features such as balloon payments, redraw facility, extra repayments, and more. These can score you a big win when it comes to paying off your debt comfortably and in a flexible manner.
Apply online and secure your new set of wheels
Have you found a secured car loan that speaks your language? Then your next step is clicking that green “Go to Site” button. Before you visit the lender’s website, keep in mind that you’ll generally need the following to qualify:
- Driver’s licence;
- Comprehensive insurance;
- Proof of income; and
- Details about the vehicle you want to buy.
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