Here’s what to keep in mind before applying for a car loan for used cars:
1. Age of the car
Lenders may have restrictions on the maximum age of the car you're purchasing, especially if the loan is secured against your car. This is because older cars usually have more maintenance issues and could decrease in value quickly, making them a riskier security for the lender.
While this varies from lender to lender, at Wisr we offer car loans for used cars that have a maximum age of 20 years at the end of their loan term.
2. Loan term
At Wisr, we offer loan terms of 3, 5 and 7 years. So, which one should you pick?
Well, the right loan term for you will ultimately depend on you and your financial situation. The shorter the loan term, the higher your monthly repayments will be. However, opting for a shorter loan term will generally save you money on interest over the life of the loan.
If you choose a longer loan term, your repayments will be smaller, but you’ll end up paying more interest overall. So, what’s right for you will depend on how much you can comfortably afford to repay each month vs how quickly you want to repay your used car loan.
Want to get a clearer idea of how loan terms affect your monthly repayment amount? Use our handy car loan calculator to see the impact.
The good news is that here at Wisr, we don’t charge any early repayment fees for making extra repayments or repaying early in full. So, if you opt for a long loan term and your circumstances change, you can increase your repayment amount and repay your used car loan quicker to save on interest.
3. Loan amount
The loan amount you can borrow in Australia depends on the value of the car you're buying, the type of loan you choose, your creditworthiness, and your income.
As we mentioned earlier, at Wisr we offer maximum loan amounts of $62,000 for unsecured loans and $147,000 for secured loans.
However, how much you’ll actually be able to borrow depends on how much you can comfortably afford to repay each month and whether or not you have a good credit score.
Not sure how your credit scores are shaping up? View them for free on Wisr App and get personalised insights into how you can take yours to the next level.
4. Interest rates
Interest rates for used car loans in Australia can vary depending on whether you're taking out a secured or unsecured loan. As mentioned earlier, secured loans tend to offer lower interest rates since they are backed by the car as collateral.
That said, the interest rate that you’re offered by a lender will depend on how strong your credit score is. The better your credit score, the better the interest rates you’ll have access to. Other factors that can influence your interest rate include whether you’re a homeowner and the age of the vehicle you want to buy (if it’s a secured loan).
The most accurate way to find out what interest rates are available to you is to get a rate estimate. At Wisr, our rate estimate won’t affect your credit score, so you can assess your options at no cost to you.
Want to know more about all things car loans? Check out our Smart Guide: The complete guide to car loans in Australia.