How to Get a Loan for a Car in Australia

Have you found your dream Car and are ready to apply for a car loan?

There are two main ways you can go about getting a loan to buy your dream car in Australia.

  1. You can apply for a Loan through a Dealership
  2. You can apply for a Loan directly through a lender

Here’s How to Get a Loan to buy a Car in Australia in 2022.

1. How Much Are You Going to Borrow for A Car Loan?

The first thing that you need to know before applying for a loan is how much you need to borrow. The amount that you are looking to borrow will determine whether you will et approved or not. The more you want to borrow, the harder it becomes.

It is always recommended that you try to minimise your loan amount as much as possible to maximise your chances of receiving approval. It has been found that having a 10 – 20% deposit significantly increases the chance of receiving approval for a loan to buy a car.

Related Article: How Much Can I Borrow For My Car Loan in Australia?

2. Check Your Credit Score

Don’t bother applying for a loan if you don’t know your credit score, you would be wasting your time. A Credit Score is an individual score that determines your lendability based on your current earnings and financial commitments.

It is important to check your credit score prior to beginning your application as it will give you a clear indication on whether you are lendable or not. All lenders will check your credit situation prior to approving a loan.

The benefit of checking your credit score is you can work on improving any areas that may need to be approved prior to applying.

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3. Choose Your Loan Type

When it comes to loans there are a few different options you can choose from.

The three most common loan types used to purchase a car are:

  • Secured Personal Loan: A Secured Car Loan is a loan that uses your vehicle as security. If you fail to repay your loan, they vehicle will be repossessed.
  • Variable Rate Personal Loan: Your repayment amounts differ based on the current interest rate at the time. The benefit of a Variable loan is you can pay more than the allocated amount to get ahead and also redraw funds if and when you need.
  • Fixed Rate Personal Loan: You know exactly how much you are going to pay every month even if the interest rates rise.

Each loan type has its advantages and disadvantages and choosing often comes down to your own individual circumstances. It is important to look into each of the loan types thoroughly before selecting.

4. Shop Around

The most important thing that you can do when it comes to getting a loan for a Car is to shop around. There are hundreds of financial lenders available in Australia, each offer their own terms, conditions, and rates.

To get the best loan deal, it is important that you search what each provider is offering and choose the one that best suits your individual needs. The benefit of shopping around is some providers may offer lower deals that could save you thousands over the life of the loan. It is important that you consult with all relevant parties and understand each term and condition before selecting a loan provider.

5. Apply Directly

Once you understand how much you are looking to borrow, confirmed that you can service the loan, chosen your loan type, and found your lender, it is now time to apply for that loan directly.

Application processes do vary from lender to lender and will require some paperwork like your recent pay slips, your on-going financial commitments etc. Each lender will have their own application process, with most offering a simple submission form on their website which could be completed in under 10 minutes.

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Final Word,

To increase your chances of receiving approval for a loan to buy a car it is best to be prepared. Find out your credit score, understand how much you need to borrow and if you can service the repayments, learn about the different loan types, and most importantly shop around. The 5 tips mentioned above is how you can get a loan for a Car in Australia.

We hope you enjoyed reading this article. To read more articles like this, please visit the Shop for Cars latest news page here.

How Shop for Cars Can Help You Get the Cheapest Car Loan?

Shop for Cars gives Aussie motorists the ability to apply for a Car Loan from over 60 different Australian Lenders in the click of a button.

Using Shop for Cars, once you find the vehicle that you are interested in, you can apply for finance directly on the individual vehicle listing. In a few short minutes, you can submit your initial application and choose the cheapest lending option available. Fast, easy, simple!

To learn more about Car Finance on Shop for Cars click here, or search for a vehicle you are interested in on the Shop for Cars homepage here.

About Shop for Cars,

Shop for Cars is Australia’s first car dealership-only online classified. Shop for Cars brings you the best quality new and used vehicles from trusted motor dealers Australia wide. Shop for Cars currently has over 12,500 cars listed for sale all from licensed Motor Vehicle Dealers ONLY.

Click here to begin your search.

DISCLAIMER: This is all based on opinion please research and consult with all relevant parties to make the best lending decision.