Frequently asked questions about car loans

In order to release funds once the loan is approved we require the tax invoice and completed loan documents. Once those have been sent to us, it can take 24 hours.

For more information specific to your situation call us today.

Yes, there can be two applicants on a car loan.

Find out if you’re eligible today.

The bare minimum eligibility requirements for car loans are holding Australian citizenship or permanent residency, being over the age of 18, and earning some type of income. However, as part of responsible lending, lenders are required by law to ensure any loan product they approve will not put the borrower at harm of financial instability or risk.

There are a number of factors that can affect whether you’re eligible for car finance. They vary depending on the type of car finance that you are applying for.

To take a look at the full list of what you need for a car loan, click here.

The car loan approval process can typically take up to four days before you receive the green tick of approval. This can be influenced by factors including your credit history, income, identity verification and promptness in providing loan documentation.

Itching to get your hands on your new set of wheels? If you’re in the market for a new car, chances are you want to take it home as soon as possible. Some car lenders may claim to offer ‘immediate approval’ for car loans, yet the time frame for approval will always depend upon how fast the borrower provides their supporting documentation.

If you follow some simple steps, our friendly car lending specialists at loans.com.au: Online home loans and car loans can approve you for a car loan in under 4 days.

How long does car loan approval take?

At loans.com.au we only fund vehicles for a maximum of 7 years.

There are a number of things that influence your borrowing capacity, as well as the terms, interest rates and duration of any given car loan. As a result, it’s impossible to say exactly how much you can borrow for the purpose of a car loan.

The easiest way to determine how much you can borrow for a car loan is to use the borrowing power calculator tool that we offer. Our borrowing calculator is an easy, accessible way of checking your borrowing capacity, as well as getting a clear picture of how your repayments will look over the course of the loan, with interest figures included, too.

You can find our borrowing power calculator here.

For a smooth and comfortable car loan application, you will need to provide us with a range of documents that prove you’re a reliable borrower. These documents can be summarised as:

• Personal information and identification:
• Proof of income
• Proof of assets and liabilities
• Information about your car and insurance

We are required to ask for these documents to comply with anti-money laundering legislation.

Importantly, it’s highly likely you will need to provide proof of comprehensive car insurance before receiving the stamp of approval. This is so you can repay the loan in full if the car is ever damaged so badly it needs to be written off.

What are the eligibility and document requirements for a car loan?

Yes, we can offer you pre-approval. Pre-approval can help to strengthen your position when negotiating with the dealer. It is difficult to play hardball when you are depending on the dealer for car loan approval! If you know your budget and are buying a car with a pre-approved loan, you can bargain with more confidence.

Tips to get approved for your first car loan

A fixed interest rate car loan is a loan with the option to lock in (or ‘fix’) your interest rate for a set period of time (usually between three and five years). Most borrowers will choose this type of loan if they want to have cash flow certainty. By knowing exactly what your car repayments will be, you’ll have the same repayments for the whole fixed period.

The main advantage of a fixed-rate car loan is the certainty of knowing your repayments. By “fixing” your loan for a period of time, you know what your repayments will be every week/fortnight/monthly payment.

Fixed vs variable car loans.

What is a secured car loan?

A secured loan is borrowed against an asset of equal or greater value – in this instance a car. The car acts as collateral for the lender against the amount you intend to borrow.

For example, if you want a loan of $40,000 to buy a ute for your business, the vehicle can be used as security for your loan. The loan is known as 'secured' because if you’re unable to make your repayments, the lender may repossess the asset and use the funds from its sale to repay your outstanding loan balance.

Secured loans tend to have lower rates than unsecured loans and you might be able to borrow a greater amount or stretch the repayment period longer.

What is an unsecured (or personal) car loan?

Unlike a secure loan, unsecured loans don’t use an asset as collateral, meaning that there’s no ‘easy’ way for lenders to recover their funds if you default.
The advantage of an unsecured loan is that you don't have to put anything up as security – however, if you meet your repayments then there really is no risk to the asset. Unsecured loans also often come with higher interest rates, a lower borrowing limit and a shorter loan-repayment terms compared to secured loans.

At the moment, we are only able to offer consumer car loans. Watch this space, though. To find out more about our car loans click here.

Green cars are usually very fuel efficient and often have lower running costs. At this stage, loans.com.au will only consider electric cars to be eligible for the green car discount. To qualify for the ‘green’ discount, your car must be electric, meaning your vehicle has significantly lower CO2 emissions when compared to other cars of its size.

Cars eligible for our green car discount include models from a number of manufacturers, including Tesla, Toyota, Mercedes, BMW and more.

Some examples of eligible cars that we’ve helped customers with include:

• Tesla Model 3
• MG Electric
• Hyundai Ioniq 5

Take a look at how you can save money with our Green Car Loans.

A variable rate loan is a loan where your interest rate will move (or ‘vary’) with changes to the market. This means you need to be able to adjust to possible rises and falls in your repayments.

Variable car loans often have appealing features like the ability to make extra repayments with a redraw facility (often at no extra cost) to help you pay off your loan sooner and save you interest.

Variable rate loans are more uncertain than fixed interest rate loans. This can make budgeting for your interest payments more difficult because you have to take into account potential rate rises. If you aren’t prepared, you could have trouble keeping up with repayments.

Fixed vs variable car loans.

A car loan comparison rate is the interest rate of a car loan plus fees and charges such as account keeping or administration fees, rolled up into one figure and expressed as a percentage per annum (per year). The comparison rate gives a would-be borrower a clearer understanding of the actual cost of their loan.

This is typically calculated as a $30,000 loan over 5 years. Since the comparison rate also includes most of the loans fees and charges, this allows you to calculate your budget and get a better estimate of how much you can expect to pay each month in repayments.

Compare our car loans here.

Although some lenders will require a deposit, it’s entirely possible to get a car loan without one, letting you borrow the car’s full value over the loan term.

A car loan deposit can be a good way to reduce your monthly payment and interest paid, but find out if you actually need one.

Do you need a deposit for a car loan?

A balloon payment is a one-off lump sum that you agree to pay your lender at the end of your car loan’s term. In exchange for owing a lump sum at the end of your loan, you are only required to pay interest on part of the principal. Because balloon payments will typically account for a large proportion of your car loan’s balance, they can reduce your loan repayments.

It is called a "balloon" because it is very inflated compared to your other payments. The payment can be up to 50% of the car’s purchase price, depending on the length of loan term and other factors.

Balloon payment car loans explained

A car loan allows you to borrow a certain amount of money to buy a car. In return for the loan, you pay interest to the financial institution that lent you the money.

You need to pay back the loan within a certain period of time (called the term) which ranges from three to five years at loans.com.au. This is the amount of time over which you agree to pay back the loan, usually in monthly installments.

In addition to repaying the amount you borrow, you will also be charged interest. You can try our car loan calculator to work out approximately how much your car will cost you over the term of your loan.

To read more about this: How do car loans work? 

To check out our car loan calculator: Car Loan Repayment Calculator 

Yes, it’s highly likely you will need to provide proof of comprehensive car insurance before receiving the stamp of approval. This is so you can repay the loan in full if the car is ever damaged so badly it needs to be written off.

By law, every vehicle in Australia must be insured with compulsory third party car insurance (CTP). CTP covers you for the liability costs in case you (god forbid) injure or kill someone on the roads and it’s the bare minimum amount of insurance you’re legally required to have - but it’s wise to take out a higher level of coverage because CTP doesn’t insure your or other driver's cars against damage.

What are the eligibility and document requirements for a car loan?

As part of the Firstmac Group, loans.com.au and OnlineAuto work together to help you buy your brand new car, and get you low rate car finance.

OnlineAuto is truly a one-stop-shop for buying a car. Their team of experts will help understand what vehicle you’re looking for, advise stock availability and then let you know when the car can get delivered. OnlineAuto can also assist with the trade-in of your existing car, which can help to fund a deposit or the purchase of your new car.

From there, our lending specialists at loans.com.au will help you secure low rate finance and even car insurance if you need it, and the OnlineAuto team will arrange delivery of your new vehicle to your door with a full tank of fuel.

From sourcing your car to the settlement of your finance, you’ll barely even lift a finger! Thanks to loans.com.au and OnlineAuto, we can do all the hard work for you.

OnlineAuto.com.au - The Car Buying Experts

You can pay out your car loan early, however, there may be certain fees or penalty charges for doing so depending on your car loan lender and the specific terms of your agreement.

To find out more, get in touch today.

Yes, you can make additional payments on your car loan, however it’s important to be mindful of your lenders terms and fees for your car loan. If you end up paying out your car loan early, you will likely be charged an early repayment fee.

With loans.com.au, if you have a variable car loan, you have the ability to redraw on any additional payments you make to your car loan. However if your car loan is fixed, you will not have any redraw facility'

How to reduce your car loan repayments.

Typically, lenders will require you to make monthly repayments on your car loan. However, some will allow you to make fortnightly or weekly repayments. By doing so, you’ll be making an extra month’s worth of repayments in a year, as there are 52 weeks in a year, which works out to be 13 months. This can help to reduce the length of your loan and how much interest you pay.

How to reduce your car loan repayments.

The ability to redraw any advance funds on a car loan is only available on variable loans. If the loan is fixed you can’t redraw any advance funds.

Find out more about variable car loans.

When a car under finance is written off, the insurer is obligated to pay the outstanding amount of the loan to the car loan provider. Unfortunately, after taking the excess and insured value into account, there is sometimes a shortfall and the loan balance cannot be repaid in full.

Get in touch with your car loan provider as soon as you can, as they’ll be able to tell you what options are available.

While there can be a few complications when selling an encumbered car, it’s perfectly legal to do so. Most lenders won’t have an issue with you selling your car while it’s still under finance, but they will request that you pay off the balance of your loan once you receive the funds.

Depending on your lender and your car loan terms, you may need to pay a break fee or early repayment fee when paying off your balance. Be sure to read over your contract or ask your lender if you’re not sure.

How do you sell a car under finance: what to know