Cheap Car Loan

Ever wondered what the difference is between secured car loans and personal unsecured car loans and how that difference affects their finance and their repayments. The car loans terms can be only minor, but is larger when the true cost of each is taken into account.

Before discussing secured and unsecured car loans in more detail, let’s first have a look at the different components that determine the cost of your loan and of your monthly repayments. The cost of the car finance package is the total you repay less the loan amount borrowed. Hence, let’s say you are repaying $20,000 at 12% interest rate over 36 months; you will repay at the rate of $664.29 per month. That would total a repayment of $23,914.44, and the cost of the loan would be $3,914.44 plus any set-up or administration fees. A finance calculator will assists in calculating these figures to calculate the real costs of car finance.

An option to a finance package would be car hire purchase (HP), where you hire the car over the repayment period and get the title to the motor car with your final payment. Until then the car belongs to the HP company.

However, most finances are either secured or unsecured, and not all loan companies offer car loans that are unsecured so let’s consider secured loans first. Secured car finance is one whereby the lender offers the loan with the car as security. If you fail to make payments, the lender can sell the car to recoup their money. It could be probable to get a secured car loan on older motor vehicles, often 7 years, but the car finance term or loan term may be requested to be shorter than the standard 5 yearsor not at all by using your home or some other form of security. These are not exactly classed as car loans. normally the car is used as security over the loan.

If you prefer you can request no deposit car finance and have all on-road costs added to the amount financed. Options like registration , loan insurance and comprehensive auto insurance as part of the financing deal. Loan insurance makes sure that the loan is paid off in the event of your death during the loan period, and comprehensive car insurance is needed to make sure that the car is in good condition should it be needed to repay the loan in the event of you defaulting on your payments.

This might all sound like doom and gloom, but these are standard conditions for any secured loan, not only car loans. Secured car loans terms are from 1-7years, and the interest rate will be lower than that for an unsecured car finance where the finance company charges extra to compensate for their added risk. As with any loan, a deposit will result in lower payments, or a shorter term, whichever you prefer.

Some car loans can come with an option to have a balloon payment, which is an amount borrowed where you pay interest only and finalised the principle when finalising the loan. This is popular by those whose income will increase over the period, and they will be in a better financial position to pay a lump sum in 3 - 5 years time. This too results in either a lower monthly repayment or a shorter repayment term.

If you are buying a used motor vehicle, your car loans intererst rates can be priced very differentlyaccording to the finance company and the age of your car. Many will charge higher loan rates, and the current credit down turn has changed the outlook of many lenders to unsecured car finance in particular. Many no longer offer unsecured finance due to the increased risk in the current economic climate.

However, they are still available, and some loan brokers can ensure you get the best unsecured car loan available. In addition to the car loans interest rates, you should also evaluate the fees charged, since they can involve a considerable outlay for you before you get the loan.

The major differences between secured and unsecured car finance, therefore, can be summarized as:

Secured loans are more affordable to repay, with usually lower rates.

Cheap Car loans that are secured must have full comprehensive car insurnance, while unsecured financing will not.

Both loans could require deathinsurance cover for the credit, but secured loans are more likely to.

You can sometimes include comprehensive insurance, registration and other costs in the secured loan, but with an unsecured car financing you must include the the costs on top of the amount borrowed.

Fees for unsecured auto car loans can be significantly higher than for secured loans.

Not all finance companies will offer unsecured auto loans.

There few doubts that if your car is young enough to be given a loan with the car as security, then that should be your option. You might be able to arrange a secured finance for an older vehicle with your house as security, but you will have to make sure to maintain the finance repayments since lenders are becoming unsympathetic in the current economic crissis.

An alternative to a car loan would be car hire purchase (HP), where you hire the car over the repayment period and receive the title to the vehicle with your final payment. Until then the car belongs to the HP company.

However, most loans are either secured or unsecured, and not all lenders offer unsecured car loans so let’s consider secured loans first. A secured car loan is one whereby the lender offers the loan with the car as security. If you fail to make payments, the lender can sell the car to recoup their money. It is possible to get a secured car loan if the car is over a certain age, often 7 years, but you may find the loan term only being approved on a shorter term or not at all by using your home or some other form of security. These however are not strictly classed as car loans. It is generally the car that is the security.

Secured car loans can include on-road expenses such as the registration, loan insurance and comprehensive auto insurance as part of the financing deal. Loan insurance makes sure that the loan is paid off in the event of your death during the loan period, and comprehensive car insurance is needed to make sure that the car is in good condition should it be needed to repay the loan in the event of you defaulting on your payments.

This might all sound like doom and gloom, but these are standard conditions for any secured loan, not only car loans. You can normally have a secured car loan over one to five years, and the interest rate will be lower than that for an unsecured car loan where the lender charges extra to compensate for their added risk. As with any loan, a deposit will result in lower payments, or a shorter term, whichever you prefer.

You could also apply a balloon, which is like a deposit in reverse, payable at the end of the period. This is popular by those whose income will increase over the period, and they will be in a better financial position to pay a lump sum in 3 - 5 years time. This too results in either a lower monthly repayment on a car loan or a shorter repayment term.

If you are buying a used car, your loan will be priced differently according to the lender and the age of your car. Many will charge higher interest rates, and the current credit squeeze has changed the outlook of many lenders to unsecured car loans in particular. Many no longer offer unsecured loans due to the increased risk in the current economic climate.

However, they are still available, and some online car finance brokers can put you in touch with a choice of lenders that are still willing to offer you an unsecured car loan. In addition to the interest rate on car loans, you should also compare the fees charged, since they can involve a considerable outlay for you before you get the loan.

The major differences between secured and unsecured car loans, therefore, can be summed up as:

Secured loans are cheaper to repay, with generally lower interest rates.

Secured loans demand fully comprehensive car insurance, while unsecured loans do not.

Both loans could require life insurance cover for the loan, but secured loans are more likely to.

You can sometimes include insurance, registration and other costs in the secured loan, but with an unsecured car loan you must include the the costs on top of the amount borrowed.

Fees for unsecured auto loans can be considerably higher than for secured loans.

Not all lenders will offer unsecured auto loans.

There few doubts that if your car is young enough to be given a loan with the car as security, then that should be your option. You might be able to arrange a secured loan for an older car with your home as security, but you will have to make sure to maintain the repayments since lenders are becoming unsympathetic in the current economic climate.

One of Australia’s leading Cheap Car Loan Specialists, Finance Ezi is experienced and equipped to handle your entire car financing needs, be it business or personal. Being in this industry for over four years, we have an understanding of how things work and this knowledge helps us to cater to our customers’ needs on time every time.

With an increase in the pace of modern day life, the need to own one’s own car is becoming more and more evident. The mere thought of buying a brand new car is positive and exciting. However, the actual process of buying and getting the best car finance / loan deal calls for serious research and decision making. This is where most of us, especially first time buyers need help.

- How much can you afford to spend on buying a car?
- Which car is right for you?
- What are the financing options available?
- What is the procedure for acquiring a car loan?
- How can you reduce the interest rates?
- Which financial institution should you approach for the loan?
- Can you get a loan for the entire amount of the car?
- Do you need to and can you afford to make a down payment?
- Which papers are required for applying for a car loan? Etc

These are just some of the issues that require your attention. Let’s face it – most of us do not have the answers to these questions. Help is at hand!

Finance Ezi can assist you at each step of the way in making the correct purchase decision and securing a good car loan deal.

Our team of over 30 car loan specialists will do all the research, analysis and homework for you, presenting you with some of the most competitive low interest rates for both personal and business car finance throughout Australia! We even offer premium discounted interest rates for luxury vehicles and assist in finding a car through the many car yards, wholesalers, and car search companies we are affiliated with.

With Finance Ezi, you can save yourself a lot of time and effort that would be spent in approaching and following up with multiple banks and financial institutions for information. Our car finance specialists will provide you with a list of some of the best bank alternatives and help you in procuring the lowest interest rates for your car finance – options that will match your budget and put you at ease.

Come one step closer to purchasing your dream car by hiring Finance Ezi’s specialized car financing services in Australia.

With Finance Ezi, you get –

- Fast same day approval
- Easy online car finance application
- Useful Car Loan Calculator
- Car finance comparison
- No deposit low interest car loans with 7 year terms, structured payments, balloon payments and residuals available
- Car insurance with a choice of motor vehicle insurance companies.

And the best part - we do not charge any brokerage so you don’t have to worry about spending more by hiring us.