Fixed Rate Car Loan

Fixed rate car loans are a popular option with borrowers who prefer to know exactly what their repayments will be across the full term of the car loan and wish to avoid any exposure to potential interest rate changes, that may occur across their loan term. Unlike a variable rate car loan, which may be changed at any time by the lender, to keep in line with changing economic conditions, a fixed rate car loan enables you to agree a rate with your lender at the start of the loan and agree that this will be fixed and so remain the same for the term of the loan.

An important consideration with fixed rate car loan is that if interest rates do fall during the term of your loan, any effect of these rate reductions will not be reflected in your loans interest rate, which will remain at the rate that it was fixed at the commencement of the loan. On the flip side if rates rise, these shifts in rates would equally not impact your car loan rate.

To calculate your fixed rate repayments on the selected fixed rate loans compared in the table below simply enter the amount you wish to borrow and your preferred loan terms into our car loan repayment calculator below, your monthly repayment will then be shown in the “monthly repayment “ column, these values can be ranked by clicking the column header

Cost of Fixed Rate Car Loans

The interest rate - At the time you agree the fixed rate with your lender, the rate will generally be slightly higher than the available variable Interest rates. This rate difference generally reflects the lenders buffer designed to protect them from any potential interest rate increases across your loan term.

Early Payout Penalties - It’s common for Fixed Rate Loans to feature early payout charges, these tend to be in the range of $100-$200.

Extra Repayments - Many fixed rate car loans allow borrowers to make extra repayments and so reduce the amount of interest you will pay on the loan. This reduction in interest charges is delivered by the fact that interest is calculated against the daily balance of your loan, so every dollar you reduce this by means that dollar is not costing you any interest charges. With a fixed rate loan, if you make extra repayments your monthly repayment will usually remain unaffected, with the extra repayments delivering a reduction in the loan term and in turn the interest charges.

 

Loan terms

Fixed rate loans tend to available from 1-5 years compared to variable rate loans that tend to be offered for a slightly longer maximum period of 7 years.

 

Secured or Unsecured Car Loan on a fixed rate

Both secured and unsecured car loans are available on fixed rates with secured loans generally offering higher maximum loan thresholds, which on average are around $80,000, though offers of $100,000 are available from select lenders and popular with new car buyers.

 

Applying for a Fixed Rate Car Loan

To complete an online application for a fixed rate car loan you will need to provide some personal details and some documentation to validate your identity and financial position:

Validating your ID

This is standard process when you apply for any type of credit from a lender for a credit card, personal loan or in this case a car loan. Documents that will typically be required include:

  • Australian Drivers License or Passport - It provides the lender with a photo ID
  • Birth Certificate - Offers a robust form of proving your identity
  • Medicare Card - Act as official proof of your identity

 

Address and contact details

You will need to confirm your residential address and contact phone numbers. Your residential address is likely to be used to conduct a credit assessment where the lender contacts a Credit Bureau to attain details of your credit history.

 

Credit Report Check

All lenders will conduct a credit report check that they use as part of their process to assess the probability that you may default on the car loan. Your credit report contains details of your credit history in terms of any previous and current loans and of how you are managing these, specifically in terms of making payments on time and not defaulting or missing payments.

 

Proof of income

All car loan applications include a request for details of your income and expenses, lenders may request documents to validate the income levels stated in your application, this will normally be wage or salary slips for the last 3 months and potentially bank statements for the last 6 months.

 

Details of the car you wish to purchase

If you are using the car as collateral in a secured car loan you will need to provide details of the car including registration and engine number. If you are purchasing your car from a dealer you may need to provide their details so the lender can organize payment direct to the dealer.