What is a personal loan?

A Personal Loan is a personal finance product where the financier lends the customer funds which can be used to purchase a car, but does not hold any security over the loan. Personal Loan can also be known as an Unsecured Car Loan.

How does a personal loan work?

Under a Personal Loan the financier advances funds to the customer, which the customer can use to purchase a car. The customer takes ownership of the vehicle at the time of purchase, and must repay the loan to the financier over the agreed terms. The financier does not hold the vehicle as security for the loan.

  • Flexible contract terms ranging from 12 to 120 months (one to ten years)
  • Fixed or variable interest rates
  • Deposit (either cash or trade-in) may be used
  • A tax deduction may be available when the vehicle is used for business purposes

* Please refer to your accountant for eligibility.

Common questions about your car loan

A personal loan (also known as an unsecured car loan) involves a finance company lending you the money to purchase a vehicle for personal use. Although you’ll make regular loan and interest repayments over a period agreed with your finance company, you will own the vehicle from the time of purchase, due to the fact that the loan is not secured against the vehicle.

Benefits include:

  • Flexible loan repayment periods, ranging from two to 10 years
  • The option to reduce monthly repayments by setting a final balance (Residual Value) payment
  • Simple approval criteria
  • The option to put down either a lump sum or your current vehicle as a deposit to reduce the amount borrowed
  • The potential to claim tax deductions if the car is being used for business purposes

A personal loan is classed as a personal finance product, however, it may still be possible to claim a tax deduction on your payments, depending on how frequently you use your vehicle for business purposes. For more information about claiming vehicle-related tax deductions, please visit the ATO website.

A personal loan is a good option for those looking to purchase a vehicle that may not meet the criteria outlined for a secured car loan, for example, an old or low value vehicle. However, a car loan or novated lease is generally a cheaper finance option to consider.

Estimate your repayments

If you are still researching or even daydreaming about your dream car, you can use our calculators to help work out your weekly, fortnightly or monthly repayments. Personalise the amount borrowed, interest rate, term and residual value.

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