Are you buying an older, cheaper vehicle and need a loan to help you get across the line and hand over the cash?
Not all car loans are available for all cars. Many car loans are for new or almost new cars only. And car loans for cheap, used cars often have a higher rate, and are more expensive than loans for newer cars.
But you can get a cheap car loan for a cheap car. Infochoice has plenty of great finance options for people in the market for a cheap car loan to go with a cheap car.
To check if a car loan listed on Infochoice is available for older used vehicles, click on the features tab at the top left hand side of the table. Now a new table appears and the far right hand side column is labelled Car Type. Car loans tagged as Either are available for both new and used cars.
Car loan vs credit card
A car loan for a second hand car may be for a loan amount of anywhere between a few thousand dollars up to about $20,000 or more.
For older, less expensive cars, many people may be tempted to use a credit card to help finance a purchase. Either by paying for the car directly from the dealer by credit card or withdrawing cash from the card using the cash advance feature.
This means that you will pay a high rate of interest – up to 20 per cent or more depending on your credit card – on the price of your car. That is a significant debt accruing lots of interest. And a credit card has very low minimum monthly repayments. Without discipline a large debt on a credit card can be difficult to dislodge and can get more difficult if interest owed is added to the original debt.
A car loan or an unsecured personal are generally cheaper than a credit card and has a set time frame for repaying the debt.
Car loan vs personal loan
Some lenders will provide you with an unsecured personal loan for an older car, rather than a secured car loan. Your car may not be worth enough for the lender to be able to it for security on a debt.
A personal loan is still a cheaper option for financing a car purchase than a credit card.
What are the best rates for cheap car loans now available?
Some lenders will lend as little as $500 in an unsecured personal loan, while others have lower limits of $1,000, $2,000 or $5,000.
Bank Australia has Fixed Rate Car Loans that are available for amounts of as little as $1,000 for purpose of buying second hand cars. Bank Australia is currently charging 6.45 per cent and $150 application fee on car loans for older cars.
CUA has car loans for cars between 2 and 7 years old with a fixed rate of 7.29 per cent. For older cars CUA offers a personal loan currently charging 12.99 per cent.
Bendigo Bank has a secured personal loan for finacing car purchases that is currently charging a fixed rate of 7.79 per cent.
People’s Choice Credit Union has a secured personal loan for financing cheap car purchases that is currently charging a fixed rate of 11.99 per cent with a $250 application fee.
There are hundreds of other good car loan deals for older or cheaper cars no listed in Infochoice. Check and compare car loans from all of Australia’s major banks and lender here.
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