Things you need to know about secured car loans in Australia
- Aug 15, 2019
People often get confused between personal loan and secured car loan. There is a fine difference between the two types of loan that needs a clear understanding especially if you are planning to get a car loan to purchase your own personal vehicle.
Therefore the purpose of this article is to provide you a comprehensive knowledge about secured car loans that is specifically required to get your hands on the steering.
Let’s begin with the difference between personal loan and secured car loans and then we will move towards to highlight the important things you need to know about secured car loans in Australia.
What is Personal Loans?
A personal loan is a type of loan that you can borrow for any reason i.e. for investments purpose, to purchase domestic stuff or do revamps. With personal loan, a lender lends you an amount that varies from $1000 to $50,000 for a time period of generally 1 to 3 years. The interest rate will be low if you decided to choose shorter loan term period but the long loan term period turns out to be expensive due to the extended time period to repay the principal loan.
As specified above, the personal loan can be utilized for the following purposes.
- - Buying older mechanical automobiles
- - Combine debts
- - Capitalize
- - Home-based renovations
- - Outing
- - Any other private project
What is Secured Car Loans?
A secured car loan is a type of an auto loan where a lender is granted over the rights of your valuable asset, in most cases the car itself, during the duration of your loan term. When you purchase a vehicle, the investor will list their interest in the automobile on the Personal Property Security Register (PPSR), a nationwide online information board that displays who has an interest in valuable property objects to prevent the sale of an asset by somebody who does not have complete ownership of the asset.
Comparison between personal and secured car loans
The given table provides an overview of a brief comparison between personal loans and secured car loans.
Secured Car Loans
Money can be used for any purpose
Finance must be only used for car purchasing
Older vehicles can be purchased
The age of the vehicle must not be less than 7 years
Higher interest rates
Lower interest rates
Benefits of Secured Car Loans
The great benefits of the secured car loans are as follows:
1- Accessibility of a lower car loan interest rate
2- Most banks allow you to borrow higher amounts i.e. $100,000.
3- The lender removes its registered claim at the end of the loan time period
4- With secured car loans, you have a fixed loan term with a fixed interest rate.
5- Simplification of car ownership cost by including the comprehensive car insurance in the regular car payment.
Disadvantages of Secured Car Loans
Secured car loans also have the disadvantages that are as follows:
1- The repossession of the car if the loans are not being paid.
2- Lender car auction the car to recoup for the loss if car owner failed to make timely payments.
3- If the car is sold at a lesser price than the actual car loan, it becomes a liability on the car owner to pay off the remaining balance.
4- The car you purchase with secured car loans must be less than 7 years old.
When you need to take a secured car loan?
Do not want to buy an old car
If you desire to purchase a car that is less than seven years old and then you should borrow the secured car loans to get yourself a classy four wheeler.
Fixed Loan Term
If you are looking for a loan that provides a fixed loan term and fixed interest rates than you should give secured car loan a shot.
How can you protect your secured asset?
Fixed interest rate in case of a secured car loans gives you the benefit of an inexpensive investment. To ensure that your secured asset is not at risk, you will have the opportunity to set in place a budget that allows for your secured car loan repayments. Sometimes at the time of an unexpected event, you may find deprived of yourself from the regular payments, there are other viable options for you to save your asset. Few such options are listed below:
1 - Income Protection
If you have an impairment or an unexpected disease due to which you are unable to labor, in that case income protection gives you coverage for a certain percentage of your missing salary, generally up to 75 percent.
2 - Loan Protection Insurance
Loan protection insurance is one of the better options if you want to purchase a secured car loans as it would be just a minor fee included to your regular payments. Loan protection assurance means that if you are out of labor, or cannot make refunds for any reason, the insurance will pay the rest of your advance, so you won't lose the car.
3 - Repayment Break
Under some circumstances, if you are unable to meet your subsequent vehicle loan payment, communicate with your car loan provider right away, preferably before repayment period to give you with some extra. Most investors will give you enough time to set a plan, so you won't lose your vehicle.
How can you apply for a secured car loan?
Majority of the people in Australia don’t know how to apply for a secured car loan. In one of our articles we provide information about the lenders from whom you can take the car loan. All you have to do is to take benefit of a competitive marketplace to get the most likely protected car investment.
Online Application Form
Shop around for a secured car loan. Get the quotes from different lenders online. Fill the application form for the one that meets your financial requirements. This would help you save from the arduous paperwork.
Step by Step Procedure
When you get an online secured car loan, it helps you to get the detailed information from getting an initial assessment to picking up the car.
Follow the simple rules and become an expert in taking a secured car loans.