About Car Loan

A car loan is a personal loan for a new or used car. A car loan can be taken over a fixed term, usually between one and seven years. Shopping around for the best car loan can save you thousands in interest and fees.

Most car loans are secured. Your car will typically be the security for the loan. If you don’t pay the loan back on time, the lender can repossess your car and sell it.

Fixed or variable interest rate

With a fixed interest rate, the interest rate and your car loan repayments are fixed and won’t change. You’ll know exactly how much will come out of your bank account for repayments each month. Car dealerships usually offer fixed rate loans.

With a variable interest rate, your car loan repayments can change if interest rates change. If interest rates rise, your repayments will be higher. If interest rates fall, your repayments will go down.

Variable rate car loans usually don’t have an early exit fee. This might be better if you’re planning to make extra repayments and pay the car loan back early.

Balloon payments

Some car loans offer a ‘balloon payment’ (also called a residual payment). This option means you pay off part of the loan as regular repayments, and then pay the final amount as a lump sum (this is the balloon payment) at the end of the loan.

This may look like a good deal as your monthly payments will be smaller. But you’ll have to repay the lump sum with interest, so the total cost of the loan is higher.

If you choose a balloon payment, you’ll need to be able to repay the lump sum plus interest when it falls due. Otherwise, you could end up needing another loan to pay the lump sum and interest.

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Frequently Asked Questions

Personal identification

  • 100 points of ID are required. A current passport or birth certificate = 70 points. Driver licence = 40 points. (Please note if these documents are in your maiden name, you will also need to provide a copy of your marriage certificate.)
  • Other documents that help build up 100 points include: a Medicare card, credit card, ATM/debit card, council rates notice, pensioner concession card, health care card, tertiary student ID card.

Income details

  • The two most recent payslips from your current employer. (Ideally these will show the company name, number of payslip and year-to-date income figure.)
  • The most recent Group Certificate from your employer.

If self-employed

  • The last two years’ personal and business tax returns and ATO assessments.
  • Other income details.

You may also need

  • Rental income statements or bank accounts showing rental income for any investment properties.
  • Proof of share dividends or interest earned.
  • Centrelink letter confirming family tax benefits.
  • Centrelink letter confirming permanent government pension.
  • Private pension group certificate or statement.
  • Proof of any other regular, ongoing income.
  • Documentation on your existing home loan including the date the loan commenced, loan period and any financial penalty payable if you exit the loan early.
  • Statements for the last six months for any existing home loans and personal loans.
  • The most recent council rates notice and building insurance policy on the property or properties being offered as security.
  • Credit cards:
    • If you have credit card debt, statements for the last six months; or
    • If you don’t owe anything on your credit card, the most recent statement.
  • Statements for the last six months for any existing home loans or personal loans.
  • Your most recent credit card statement.
  • Copy of the contract of sale for the property you’re buying.
  • Statements for the last six months to show your savings and investment history. (This could include share certificates, savings account statements, term deposit statements, etc.)
  • If other funds are being used for the purchase, evidence showing where the funds are held.
  • If other funds are being given to you, which are not already in your bank account, you will need a Statutory Declaration from the person giving you the money.
  • Statement for your First Home Saver Account, if you have one.
  • Statements for the last six months to show your savings and investment history. This could include share certificates, term deposit statements, etc.
  • If other funds are being used for the purchase, evidence showing where the funds are held.
  • If other funds are being given to you, which are not already in your bank account, you will need a Statutory Declaration from the person giving you the money.
  • Your most recent credit card statement.
  • Copy of the contract of sale for the property being purchased.

If you already have investment property(ies):

  • Evidence of income such as rental statements.
  • A copy of the tenancy lease.
  • A council rates notice.
  • Copy of the contract of sale for the property being purchased.
  • A letter from a property manager indicating likely rent for the new property.
  • Copy of the contract of sale for the property being purchased.
  • A copy of a valid builder’s fixed price tender, including all specifications.
  • A copy of council approved plans.

Yes. If you want to pay off the loan early and you have the sufficient fund available with you, loan can be paid off early.

Yes. Refinancing option is available if you want to replace existing loan with other Loan to get the better interest rate or to cash out for a required purpose by using equity on the existing property.

Whenever you are in need of financial support, you can contact your mortgage broker to discuss the available options.

We have our head office located in Edmonson Park in Sydney. However, we help clients who need financial assistance anywhere in Australia.

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