Choosing to work with a broker for your car or personal loan means you can find the right loan for your situation and goal. A bank or dealer will have a more limited selection and it may not be quite right for you, or as competitive as it could be. There could also be other options available such as refinancing your home loan, and your broker can do the calculations on your behalf.
A Loan Market broker has access to over 25 leading lenders, meaning they can shop around on your behalf to get the right loan structure with a competitive rate. And in most cases, get a fast turnaround answer from the lender.
A car loan is finance that is specifically designed to purchase a new or used car, van, truck, ute, four-wheel-drive or motorbike. It could be secured or unsecured. A secured loan is one where you offer ‘security’ to the lender (such as the car itself) that could enable the lender to recoup funds should you fail to meet your repayments. An unsecured loan does not require security but generally has higher interest rates and may not allow you to borrow as much.
When you take out a car loan, you agree to an amount you are borrowing, the interest rate you pay and the timeframe you will pay it off. The length of time can vary, usually from around one to 10 years. The interest rate could be fixed (where it remains the same for the whole term) or variable (where it will fluctuate throughout the term) and there may be additional fees and charges.
Another option that may be available is a novated lease, which your broker can explain to you if suitable to your situation.
Some lenders may offer an option called a balloon payment. This means you pay less in your repayments if you agree to pay a lump sum at the end of the loan term, called a balloon payment. Your Loan Market broker can run the calculations to determine whether this option will cost you more in the long run before you make your decision.
The type of car you can buy with a car loan varies depending on the lender. There are loans for new or used vehicles from both dealerships and private sales. Some lenders may have limitations on the age of the vehicle.
A personal loan is finance that you can use to pay for something, which is then paid back over an agreed amount of time. They could be secured or unsecured. A secured loan is one where you agree to collateral that you own that you would surrender to the lender should you fail to meet your expenses, enabling them to recoup the loan amount plus fees or charges. An unsecured loan does not require such collateral, but often carries a higher interest rate.
The expense the loan can fund will vary depending on the lender. It could include life events such as a wedding or holiday, a project such as a renovation or solar installation, or an item such as a boat or whitegoods. A personal loan could also be used to consolidate debt – your broker can work out whether this could save you money or is the right option for your circumstances.
Each situation is different, so there is no one answer. Your Loan Market broker can evaluate your situation to determine whether you could still be eligible for a personal or car loan. Alternatively, they can help you devise a plan to improve your credit to a point where you can get an appropriate loan.
Let us know what your goals are and we will connect you with a Loan Market broker directly.
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