All You Need To Know About Car Loans

All you need to know about car loans

Having reliable transportation is a necessity in today’s world. However, the process of securing a car loan can feel overwhelming for some, and there are numerous options and complex terms to navigate. That’s where Vision’s expert brokers come in. With a wealth of expertise in financing, we don’t just specialise in home loans; we also extend our services to help individuals secure tailored car loans to suit their specific needs and preferences.

The Difference Between Car Loans and Home Loans

The process and duties in car loans differ significantly from home loan lending. Car loan terms typically span up to seven years, compared to a mortgage of 25-30 years. This shorter term is influenced by the fact that cars depreciate over time. Additionally, interest rates for car loans tend to be higher than mortgage rates. This is largely due to the perceived risk associated with the asset itself, as a car is considered a less secure asset.

What Documentation Do You Need?

There are a set of minimum supporting documents that is required from you in order to obtain a car loan. These documents serve as crucial evidence of your financial standing and are instrumental in facilitating the loan application process. Among the required documents are:

  • Driver’s Licence and Medicare card.
  • Two recent payslips.
  • Rates notice.

By providing these minimum supporting documents, you verify your identity and residency status, offer proof of income stability, and overall evaluate your eligibility for a car loan.

Car Loan or Personal Loan?

There are some benefits of taking out a car loan instead of a personal loan. Personal loans can be either secured or unsecured, and a secured personal loan means you must offer something up as collateral in case you default on the loan. On the other hand, car loans bypass this risk by using the vehicle you purchase as collateral and securing the loan amount against it. This means that if you default on repayments, the car can be repossessed, but your other assets are safe.

Understanding Balloon Payments in Car Loans

A balloon payment refers to a single lump sum payment made at the end of the car loan, which is a percentage of the total car loan amount. Balloon payments contribute to lower monthly repayments throughout the loan; however, the interest accrues onto the balloon payment, meaning that the final payment is larger than the rest of the other loan repayments.

The Benefits of Using a Broker for a Car Loan

As brokers, we act as the middleman between lenders and borrowers seeking a car loan. In a nutshell, our role is simplify the process for you, leveraging our expertise to secure the best possible deal while ensuring it aligns seamlessly with your requirements. We take the complexity of you doing this yourself, and we get to know you, understand your individual circumstances and preferences, and help you decide on what option to go with.

  1. Personalised Service: Utilising the expertise of our brokers proves invaluable, especially if you’re uncertain about where to start. Brokers are professionals who invest time in understanding your needs, ensuring your loan is tailored to you.
  2. Assistance with Complexities: We are experts in handling any complexities, and if you don’t understand anything to do with the application, our brokers will work with you throughout the entire process.
  3. Support: We streamline the process for you, by assisting in finding suitable loans, handling paperwork, guiding you through the completion of documentation and advocating on your behalf. Our team will help you submit your documentation to lenders and will continue to any other steps related to this submission. This convenience helps save you time and effort and can enhance the likelihood of approval. 
  4. Wide Range of Lenders: Whilst banks can only recommend their loan options, our brokers have access to a vast array of lenders and loan options. With our extensive access, we don’t just stop at one lender, we will continue to find you the most suitable option for your individual circumstances and needs.
  5. Expert Guidance: Our brokers possess in-depth knowledge of different lenders, market trends and loan terms.
  6. And last of all, we get you the outcome you want!

Use Our Lease Calculator to Calculate Repayments on a Car Loan

Vision can help you get a car loan!

Working with one of our expert mortgage brokers will help you get a good deal on a car loan, that not only saves you time and money, but will ensure your long-term financial needs are met. Plus, brokers can often get you a better rate than if you went to the bank directly!

With Vision’s support, the better positioned you are to navigate the process comfortably and successfully. Contact us today to see how we can help you buy your new set of shiny wheels.