You’ve decided on your new car, now it’s time to choose how to secure the funds to make it yours. When you start researching financing options, you’ll quickly find two types of car loans – secured and unsecured. What do these terms mean, and how will they affect you?
What is a secured car loan?
If a loan is secured, it is borrowed against an asset of value, which can act as collateral for the lender against the borrowed amount. A secured car loan will usually use the car you are purchasing with your loan as security.
This security can lower the lender’s perceived risk. Since there is a lower level of risk, you may benefit from more favourable terms as a borrower. Lower interest rates are therefore common on secured loans when compared with their unsecured counterparts.
However, if you are unable to make your repayments, the car may be repossessed and sold so the lender can use the funds to make up the outstanding balance.
Handy Finance offers secured car loans.
What is an unsecured car loan?
An unsecured loan does not require collateral. While you don’t have to put up anything as security against the loan, it could mean that you have a higher interest rate to offset this risk.
Benefits of secured car loans
Secured car loans can offer several advantages that might make them an attractive option for borrowers. Due to the possible reduced risk for lenders, these loans may come with the option to borrow larger amounts.
Additionally, secured car loans are often easier to obtain compared to unsecured loans, as they can present less risk for lenders. One of the main benefits of a secured car loan is the potential for lower interest rates.
This reduced risk allows lenders to offer more flexible terms, which can make the overall loan more affordable. Many secured car loans also feature fixed interest rates, ensuring consistent payments and facilitating easier budgeting.
If you have more questions about secured car loans, you can give our credit team a call. Our experts are here to provide you with information that helps to work out which loan option is the best for your needs.
How can I get a secured car loan?
You can get a secured car loan by applying through a reputable lender, such as Handy Finance.
A car loan from Handy Finance can be between $2,001 and $100,000 and have a loan term of one to seven years. Secured car loans will always have a fixed interest rate, meaning your repayment sum doesn’t change over the life of the loan. It can be repaid in weekly, fortnightly or monthly instalments – and if you want to repay your loan early, you can. There is no early repayment fee.
Here are the steps to follow to get your secured car loan from Handy Finance:
Ensure you meet the eligibility criteria
The eligibility criteria for secured car loans are as follows:
- You must be 18 years of age or older
- You must be an Australian citizen or permanent resident
- You must be currently employed, which includes self-employment
- You must not have a history of bankruptcy or be party to a court judgment
- You must not have any outstanding or unpaid defaults.
To prove you meet this, you’ll need to submit documentation when you lodge your loan application. This includes ID such as a driver’s licence or passport and three months’ bank statements. You’ll be prompted to supply these statements through the Illion Bank Statement Service. This secure service allows Handy Finance to access a read only categorised report of your statements – it doesn’t give Handy Finance or Illion the ability to make transactions on your account. You can read more about the service at www.bankstatements.com.au.
You may also be required to submit information about the car you intend to buy with the loan.
Complete your application online
Got everything you need? Now it’s time to apply for your loan. Handy Finance has streamlined our application process, providing an easy-to-use online application form where you can submit your application for the loan.
You can also apply for pre-approval through this form. Pre-approval is a popular way to know what your borrowing power is before settling your loan. You will receive a conditional offer from Handy Finance that states the loan amount you will likely be approved for and the loan terms. You’ll have up to a month to review these terms before settling your funds.
Another way to check your borrowing power before submitting your application is to use our car loan calculator. This tool allows you to plug in your ideal loan amount, terms, credit score and repayment frequency. It provides an indicative interest rate and estimated repayment sum that could help in your decision-making process.
Once you’ve submitted everything, our credit experts will get to work. You should receive an indicative offer within minutes of submitting your loan application. If approved, you can settle the funds within 24 hours.
Tips for choosing the right secured car loan
When exploring which lender will offer you the best type of secured car loan, there are a couple of factors to weigh up. Fixed interest rates mean that your repayments remain constant over the life of the loan, they are therefore predictable and stable which can make it easier to budget. On the other hand, variable interest rates can fluctuate with market conditions, potentially leading to changes in your repayment amounts.
With Handy Finance fixed-rate car loans, you can better manage your finances and avoid the uncertainty that comes with variable rates. This stability could allow you to plan your budget effectively and ensures that your monthly payments stay consistent, providing a reliable and straightforward borrowing experience.
Discover flexible secured car loan options from Handy Finance
There is no correct answer when it comes to choosing between a secured or unsecured car loan – this will depend on your financial situation. Before choosing any loan or lender, do your research. Compare the factors we’ve covered in this article and ensure you select a loan that will meet your needs.
Handy Finance Secured Car Loans are a fair and flexible financing option for a new car. Find out more about our secured car loans online today. We also have a range of other secured vehicle loans, including caravan loans, motorcycle loans, boat loans and jet ski loans.
Approvals are subject to Handy Finance’s credit criteria and responsible lending requirements. Fees, charges, terms and conditions apply. Finance provided to approved applicants by OurMoneyMarket Lending Pty Ltd ABN 64 605 231 669, trading as ‘Handy Finance’ holds Australian Credit Licence number 488228 and is a member of the Australian Financial Complaints Authority (AFCA). The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, we recommend that you consider whether it is appropriate for your circumstances. We recommend you obtain independent advice before acting on any information in this article.
