Cheap Car Loan Options in Australia – Do they exist?
Shopping for a cheap car loan rate is a crucial part of the car buying process.
However, there are many things that affect the car loan interest rate. By managing many of these factors and understanding how they work, you can help get yourself the cheapest car loan rate available.
In this article, we will take a look at some of the things that affect your car loan rate and how you can manipulate those things to help get you the best car loan rate possible.
Loan Term
The term or time period of the loan is a big factor when calculating interest rate for cheap car loans. Typically, the longer the loan, the lower the rate. Conversely, the shorter the term the higher the rate.
This relationship comes about from the fact that the lender is trying to make as much money as possible during the duration of the loan. In order to make money over a short term, the lender must use a high interest rate to make up for the lack of time that they will be receiving interest for. Over the long term, the lender will be receiving money for a longer period of time and thus does not need to have such a high interest rate.
For you to receive the best rate possible, consider an extended loan term that makes sense for your financially. Don’t over-extend the term as then you will end up paying more money over a longer period of time.
Credit History
Another big factor when determining the rate of a car loan is the credit history of the loan applicant. When evaluating a loan, the lender must check the risk of the loan in question. The lower the credit and more volatile the history of that applicant, the more risky the loan is considered.
With that said, the risk for the lender is that they will not be paid back in full with a riskier loan. For that risk they must mitigate the potential damages by adding a higher interest rate. This way, should the loan default, they will at least get some of the initial investment back.
Featured Personal Loans
| Personal Loan | Details | Min Interest Rate | Min Comparison Rate | Min Loan Amount | Min Loan Terms | Apply Fee | |
|---|---|---|---|---|---|---|---|
 ME Bank Personal Loan | A low rate personal loan from ME Bank with no application fee for a limited time. | 13.59% | 13.81% | $5000 | 1 year | $0 |   |
 Aussie Personal Loan | A smart way to consolidate your bills to save time and money so you can pay for your holiday, a wedding or renovate the house. | 13.90% | 14.84% | $3000 | 1 year | $199 | |
 Sugar Money Personal Loan | Fixed rate personal loan with flexible options to get you funds when you need it. | 13.99% | 15.00% | $3000 | 2 years | $250 | |
 bankmecu Personal Loan | A convenient and fast way to purchase a car or debt consolidation with affordable rates and fees. | 13.49% | 14.55% | $1000 | 1 year | $150 | |
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