Guide for Car Loans in Australia
- Car Insurance,
- Sep 13, 2019
Ah, Australia… the land far away from the rest of the world covered by the ocean. Such a lovely sight. Whether you are taking a long walk by the beaches or driving the streets, you will find mesmerizing views on every single corner. But what if you didn’t have a car to travel around this beautiful place? That would really be a killjoy, right?
Well, that’s why we are here to help you out and tell you about car finance, better known to the people as a car loan, with which you can get your own car in no time and get started on the long drives to any place of your liking.
Car Finance Definition:
So, what actually is car finance? In layman’s terms, car finance is every financial-borrow-ish thing related to vehicles. Whether it be car loans, car leasing, or anything of that sort and with that being said, you would obviously have realized that there are several types of car finances. If you had not, well, now you know. Car Finances is of many different types but the main ones include; secured car loans, unsecured car loans, and car lease.
Secured Car Loans: Secured car loans are the true bad credit car loans with a low interest rate. In these types of loans, you are given huge amounts of money with a low interest rate as a loan, but your car is kept as security in case you fail to pay the loan.
Unsecured Car Loans: The complete opposite of secured car loans, unsecured car loans do not keep your car as a security but instead let you have complete ownership over the vehicle as long as you agree to pay the relatively higher interest rate. You should consider this option if you want complete ownership of the vehicle and do not want a bad credit car loan because this one is restricted for those with good credit history… kind of.
Car Leases: You can get some money to lease a car and you must pay it back in fixed times. You do not get the ownership of the car, but you certainly can buy it at the end of your term if you have enough money.
If you want to learn more about Car Finance types, you can check this link.
Interest & Comparison Rates:
Rates matter a lot when you are thinking about getting a car loan. They can decide the best loan for you and can even turn your best loan into worse. However, you should know a little about the car loan rates before you go on getting one for you. There are two different types of rates and these two are the ones that decide which direction your car loan is going to go in;
Interest Rate: Everyone knows what interest is. It is the amount of profit you give when you pay back a loan to a person. Car Finance in Australia runs on interests and despite there being a lot of ‘low interest’ car finances, the industry still manages to get a lot of profit out of them. Interest rate is a percentage of your loan you pay back in addition to the actual amount of loan. It is mentioned in a lot of car loan packages and is, in our opinion, the number one way to scam people into getting a loan. If you want to avoid getting scammed, you should also learn about comparison rates.
Comparison Rate: Similar to interest rate, the comparison rate is the interest rate itself combined with the additional fees, taxes, and charges that your loan might include. It is not always a fixed value but gives you a close to the precise idea of how much your payback amount of the loan is going to be.
Which is the best car loan for you?
There are a lot of factors you need to consider before you start deciding which car loan is best for you. The prime factor of all these is your credit. After that, there is a long list but we will try to keep it minimal and point out the most important ones:
Lowest Comparison and Interest Rates: Anything with the low interest and comparison rates are considered as the best when it comes to taking a loan. Look for a package that offers you the lowest of the comparison rates and the tenure is flexible enough for you to easily pay the money back. Learn about comparison rates here.
Lowest Risks: The car loan with the lowest risks involved is the best. You should never have to put your house up as security for the failure to pay your car loan back. It is a huge risk and the house is much more valuable than a car. Therefore, when you are taking a loan, do not take huge risks and take the most affordable, convenient, and cheapest one of all.
If you take the above mentioned two points into consideration, the car loan you get will automatically be the best for you since there would be lesser interest rates and risks. But do note that sometimes, taking risks can prove beneficial for you but only if it is a calculated risk; do not jump or rush into these delicate decisions without any consultation of supervision from someone who is an expert in these matters.
How to get a car loan?
Getting a car loan is as easy as saying supercalifragilisticexpialidocious… come on, it’s easy to say that, you just need to practice over and over again. That’s the case with car loans. Sometimes, you get denied, and the other times, you get accepted at once. In order to get a car loan, first, decide which car loan you want. When you have decided, compare the comparison rates just to be double sure.
After that, seek expert advice or consult experienced relatives or friends. Only then should you properly apply for a car loan and make sure the company/bank/broker/lender you apply for has a good reputation and does not scam people.
When you have got the loan, the only thing left to do is get your dream car. Before you do that, however, you should, as a precautionary measure, do a REVs check and there’s no better option than QuickREVs to do that for you!