Your fact sheet and comprehensive guide to car finance

Whether you’re buying your first car or another car for the family, there are many things to consider, there are also many terms thrown around by car dealers and finance brokers. Here’s your handy guide containing all you need to know to ensure you are getting the best deal on your next vehicle.

Secured Car Loan

A secured car loan means that the vehicle or ‘asset’ you are purchasing is used as collateral or security for the loan. This lowers the risk for the financier in the event that you stop making repayments, they have the right to repossess the vehicle. Because the financier has security over the vehicle and therefore an inherently lower risk, they can usually offer lower interest rates for secured loans.

Unsecured Car Loan

An unsecured car loan means that the vehicle or ‘asset’ being purchased isn’t being used as collateral or security for the loan. This means there is a higher level of risk for the lender and as such, interest rates offered will generally be significantly higher.

Comparison Rate

A comparison rate helps you to identify the true or actual cost of a loan or finance product. While it is smart to compare interest rates, it is possibly even more crucial to consider the additional fees and charges as well to effectively compare loans. A comparison rate takes into account not only the interest rate, but also the loan fees & charges to display a realistic cost of the loan. A comparison rate gives a truer indication as to the overall cost of a loan when comparing loan products.

Difference between a lender (financier) and a broker

When you’re looking for car finance, you will hear two difference names for financial service providers, lenders and brokers.

So what is the difference? A lender, also known as a financier is the party who actually provides the funds. Lenders are usually either banks, credit unions or peer-to-peer lenders. Brokers are consultants who have accreditations with many lenders and can arrange finance directly with lenders on your behalf. Brokers can effectively compare products from multiple lenders on your behalf to find you the best finance package to suit you and your needs.

Equifax Credit File

Your Equifax (previously Veda) Credit File contains credit history for any previous or current loans, credit cards, telco or utility accounts. It will also record any defaults, bankruptcies, court judgements you may have for up to seven years after they occurred. Lenders use your credit history as one of their assessment criteria to decide whether to approve your finance application. It is a good idea to ensure your credit file is up to date with your current address and that the credit history it contains is accurate to ensure your ability to be approved for finance. Keep an eye out for inconsistencies or inaccurate listings that may be errors or potentially even identity theft.

You can check your Equifax Credit File for free once a year via the MyCreditFile website.

Lowest Rate Car Finance from Loans For U

If you have any questions or would like further information about car finance or other types of finance, speak to the experts at Loans For U on 1800 538 287, who are more than happy to answer any finance questions you may have.

If you’re looking for the lowest rate car finance, compare and save today with Loans For U by getting your instant online quote now. Our experienced consultants compare hundreds of finance products from over 40 of Australia’s most trusted lenders to find our clients the best rates on car finance.