There are many different reasons for which you can take a personal loan. You could apply for a personal loan to pay your kid’s education, go on vacation, renovate your home or buy a new or a used car. A loan that you take to purchase a car is called an auto or car loan. Often, businesses take car loans to get financing for vehicles that are to be used in everyday operations.
Australia’s loan market is very competitive. There are thousands of different types of car loans that you can choose from. So do you know you are making the right decision? We will help you! This blog will provide all the necessary information you need to know about car loans in Australia before you choose one to purchase the car of your dreams.
What Is a Car Loan?
A car loan is a particular type of personal or business loan that you can take to buy a new or used motor vehicle for personal or business use. People usually take car loans when their savings are unable to cover the total cost of the car upfront. Like other types of loans, a car loan requires you to pay back the lump sum you borrowed along with interest over a certain period of time.
However, unlike other loans that have 2 parties involved, a car loan usually has 3 parties: you (the borrower), the lender and the car dealership. A lender will usually give you a cheque or any other financial instrument addressed directly to the car leadership. This is done to ensure that the money is not used for any other purpose other than the purchase of a motor vehicle.
Car loans in Australia usually lie between $5,000 and $100,000. They can be both short term and long term, depending on the amount borrowed. Car loans are typically provided for 1 to 7 years. Interest on car loans ranges between 3% and 10% and can go as high as 15%, depending upon the nature of the loan. Most car loans are secured by the vehicle that you are purchasing and have a lower interest rate than other forms of personal loans. However, if you default, the vehicle will be seized by the lender. While unsecured car loans are rare, they have the highest interest rates.
CashOnYourMobile can provide instant, unsecured car loans of up to $50,000, enabling you to refinance an existing vehicle or purchase a new or used vehicle.
Benefits of Taking a Car Loan
- Improves cash flow for businesses.
- Allows businesses to claim a tax deduction.
- Helps you establish credit.
- Allows you to save cash for other important things like vacations.
- Allows you to borrow 100% of the car’s price.
- Fits repayments within your budget.
- Breaks up the cost of purchasing a car over a long time period.
Types of Car Loans in Australia
1. Standard Loan
A standard car loan is a loan in which the lender or the financier, usually a bank, financial institution or a credit union, lends the borrower the money to buy a new or a used vehicle for business or personal use. It is the simplest form of a secured car loan.
2. Novated Lease
A novated lease is a form of car loan in which a vehicle is financed as part of your pre-tax salary. If you are a full or a part-time employee at an organization, you can make an agreement with your employer and lease provider to get a vehicle for personal use. Your employer will make the repayments from your pre-tax salary to the lease provider on your behalf. This will enable you to save thousands of dollars on income tax!
3. Chattel Mortgage
A chattel mortgage is an auto financing option for businesses in Australia that works like a standard car loan. To qualify for a chattel mortgage, you must agree that the vehicle will be used for the business at least 51% of the time. A chattel mortgage allows a business to enjoy GST benefits. It is a contract with a fixed term and interest rate and allows a business to take advantage of the tax benefits of ownership.
Applying for a Car Loan in Australia
The process of applying for car loans in Australia is fairly simple:
- You must hold an Australian nationality or be a permanent resident of the country.
- You must be at least 18 years old (although some car loans like novated lease are rarely given to those under 21).
- You must also be employed full-time or part-time or have a source of consistent income which will allow you to pay back the loan.
- You must have the following documents at the time of the loan application:
- ID proof (passport, Medicare card, birth certificate, etc.)
- Proof of income
- Employer’s information/Two-year tax returns if self-employed
- Bank statements
- Three months’ payslips
- Asset details
- Credit card and other loan details
- Vehicle details (price, colour, model, make, Vehicle Identification Number, etc.)
Get Fast and Secure Car Loans in Australia from CashOnYourMobile!
CashOnYourMobile, Australia’s most trusted lending institution, provides instant and secure car loans for up to $50,000! Whether you have your eyes set on a new vehicle or need to pay for refinancing your current one, we’ve got you covered! We provide different types of car loans for both personal and business use.
Our car loan application is easily accessible via our website and can provide you with the money you need in as little as 4 hours! We can help connect you to a wide range of lenders who provide car loans in Australia at competitive rates, even if you have bad credit. If you are eligible for a car loan, click here and fill out a short application form today to receive your financing through a secure process in the next 48 hours.