When looking for the cheapest car loan in Australia, the interest rate is one of the most important factors to consider. However, it’s also essential to keep in mind fees, loan term, and the type of loan (secured or unsecured). Below is a guide to help you find the cheapest car loans currently available in Australia.
Cheapest Car Loans in Australia
Table of Contents
1. Cheapest Car Loan Rates in Australia
| Lender | Loan Type | Interest Rate | Loan Term | Features |
|---|---|---|---|---|
| Great Southern Bank | Secured/Unsecured | From 4.49% p.a. (Fixed) | 1–7 years | No ongoing fees, flexible repayment options. |
| Aussie Car Loans | Secured | From 4.68% p.a. (Fixed) | 1–5 years | Fast approval, low fees. |
| Beyond Bank Australia | Secured | From 4.69% p.a. (Fixed) | 1–7 years | No monthly fees, discounts for existing members. |
| Heritage Bank | Secured | From 4.79% p.a. (Fixed) | 1–7 years | Flexible loan terms, no early repayment penalties. |
| Suncorp Bank | Secured/Unsecured | From 4.99% p.a. (Fixed) | 1–7 years | Low fees, optional repayment holiday. |
| Toyota Financial Services | Secured | From 5.20% p.a. (Fixed) | 1–7 years | Special deals for Toyota vehicle buyers, flexible terms. |
| Bank of Queensland (BOQ) | Secured/Unsecured | From 5.29% p.a. (Fixed) | 1–7 years | Competitive rates, fast approval. |
| Westpac | Secured/Unsecured | From 5.49% p.a. (Fixed) | 1–7 years | Flexible loan terms, no setup fees on certain loans. |
2. Secured vs. Unsecured Car Loans: Cheapest Options
| Loan Type | Interest Rate Range | Pros | Cons |
|---|---|---|---|
| Secured Car Loan | From 4.49% p.a. | Lower interest rates, easy to qualify. | The car acts as security, and can be repossessed if you default. |
| Unsecured Car Loan | From 5.49% p.a. | No collateral required, faster approval. | Higher interest rates, stricter eligibility criteria. |
3. How to Find the Cheapest Car Loan
| Step | Details |
|---|---|
| Compare Different Lenders | Use comparison websites to find the lowest rates offered by banks and lenders. |
| Check for Hidden Fees | Look for set-up fees, monthly fees, or early repayment fees that could increase the total cost. |
| Consider Your Loan Term | Shorter loan terms typically have lower interest rates, but higher monthly repayments. |
| Ensure Good Credit Score | A higher credit score (above 650) can help you secure the best rates. |
| Look for Special Deals | Some lenders offer discounted rates or special deals for new customers or specific car brands. |
4. Key Factors to Consider When Choosing the Cheapest Car Loans in Australia
| Factor | Details |
|---|---|
| Loan Term | Shorter loan terms (e.g., 1–5 years) usually come with lower interest rates. |
| Deposit | A larger deposit can help reduce the loan amount and result in a lower rate. |
| Credit Score | Higher credit scores often result in lower interest rates. |
| Type of Loan | Secured loans (where the car is used as collateral) typically have lower rates. |
| Lender Fees | Consider set-up fees, administration fees, and other potential charges. |
| Repayment Flexibility | Look for lenders who offer flexible repayment terms or repayment holidays. |
5. Benefits of Choosing the Cheapest Car Loan
| Benefit | Details |
|---|---|
| Lower Monthly Repayments | A lower interest rate can significantly reduce your monthly repayments. |
| Overall Savings | The cheaper the loan, the less you’ll pay in interest over the life of the loan. |
| Better Financial Flexibility | With lower repayments, you’ll have more flexibility for other expenses or investments. |
| Early Repayment Flexibility | Many of the cheapest loans have no penalties for early repayment. |
FAQs About the Cheapest Car Loans in Australia
Q1. What is the interest rate for a cheap car loan in Australia?
- The cheapest car loan interest rates in Australia start from 4.49% p.a. for secured loans.
Q2. How can I get a car loan with a low interest rate?
- Ensure you have a good credit score, a larger deposit, and opt for a secured car loan to get the lowest rates.
Q3. What is the difference between a secured and unsecured car loan?
- Secured loans have lower interest rates because the vehicle acts as collateral, while unsecured loans tend to have higher rates due to the absence of collateral.
Q4. How much deposit do I need to secure a cheap car loan?
- A deposit of 20% or more is generally recommended for the best interest rates on secured loans.
Q5. Can I refinance my car loan for a cheaper rate?
- Yes, if interest rates have decreased or your financial situation has improved, you can refinance your car loan to secure a better rate.
Q6. Do I need to pay any fees when taking out a cheap car loan?
- Some lenders may charge set-up fees, monthly fees, or early repayment fees, so it’s important to review the loan terms carefully.
Q7. How long can I take out a car loan for?
- Car loan terms in Australia typically range from 1 to 7 years, with shorter terms having lower interest rates.
Q8. What’s the best way to compare car loan offers?
- Use comparison websites, review loan terms, interest rates, fees, and the lender’s customer reviews to find the best deal.
Q9. Are there any car loan deals for first-time buyers?
- Some lenders offer special rates or discounts for first-time buyers, so check with banks and credit unions for such offers.
Q10. Can I apply for a car loan with bad credit?
- Yes, although you may face higher interest rates. It’s advisable to improve your credit score for better loan terms.
Final Thoughts
To secure the cheapest car loan in Australia, it’s essential to shop around, compare offers, and ensure your credit score and deposit are in good shape. While the interest rate is important, consider the total cost of the loan, including fees and repayment flexibility, to find the best deal that suits your financial situation.