Car loans

The term "car loan" refers to the amount of money borrowed by a consumer to purchase a vehicle. A personal loan is taken out to buy an automobile. All car loans are for a specific length of time between 24-60 months. This type of loan is also known as financing. Car loans generally include a variety of fees and taxes which are added to the total loan amount. If you default on your repayments, the lender can seize your car to try to recoup its losses. Car loans are paid off in fixed monthly instalments with varying terms and interest.

Documents required for a car loan

You are required to provide the following documents when applying for a car loan in Australia to ensure that we comply with anti-fraud legislation. Usually, the following documents are needed:

Identification and personal information

We need generally the following ID and personal information from you when you apply for a car loan:

• Your full name
• Your date of birth
• Your citizenship information
• A list of your dependents
• A copy of your driver’s license

Proof of income

By providing proof of your income to lenders you ensure them that you can pay back the amount applying for a car loan. We ask everyone applying for car finance to provide:

• Your two most recent payslips
• Your bank statements for the last three months

Proof of your assets and liabilities

From the viewpoint of your financial stability, another requirement for a car loan is proving what assets and liabilities you have. This proof could include:

• Information about other loans you have
• Your superannuation summary
• A summary of your investment portfolio

Information about your car and car insurance

For a car loan in Australia, we need to know all the information about the car you buy to determine its costs and your repayment amounts. For this reason, you will need to supply the following information:

• The vehicle’s registration
• The year, make and model of the car
• The vehicle’s chassis number
• A dealer invoice or contract of sale
• Proof of comprehensive car insurance

Eligibility Criteria For a Car Loan

In Australia, there are some basic car loan eligibility requirements you need to meet.

• Be 18 years old or over
• Have a regular income
• Have not filed for bankruptcy
• Be a permanent Australian resident or relevant visa holder

PROS:-

• Usually a lower interest rate than on a personal loan.
• Easier to get with mediocre credit history.
• They are often offered at dealerships.
• Fixed payment offer predictability.

CONS:-

• You don’t have title to the car until the final repayment is made.
• A deposit may be required to secure a loan.
• You can only use a car loan to buy a car.