Vehicle Finance & Personal Loans
When you are buying a car, the finance can end up being decided at the dealership, with one number to go on: the weekly or monthly repayment. This page sets out what we arrange, what is worth comparing before you sign, and when it helps to talk to us first.
Oakwood Finance is a mortgage broker, so we look at a car loan or personal loan alongside any home loan, your other debts and your credit file, not on its own. We arrange the loan through our lending partners. The lender assesses and approves it, and sets the rate, fees and conditions.
Whether you are replacing the family car, buying from a private seller, buying through your business or consolidating debts into one loan, the aim is the same: to understand what the loan will cost over the whole term, and how long it will run, before you commit.
What we arrange
These are the loans we arrange for vehicles and personal borrowing.
- Secured car loans for cars bought for personal use. The vehicle you are buying is held as security, and each lender decides which vehicles it will accept.
- Unsecured personal loans. No vehicle is held as security, and the money can be used for other purposes too, subject to the lender’s policy.
- Chattel mortgage, lease and rental for vehicles bought through a business. Our asset and equipment finance page covers the business side.
Dealer finance is arranged by the dealer, not by us. If you have been given an offer, bring it to us and we will set it beside the alternatives on total cost.
How a personal loan differs
An unsecured personal loan is a loan to you, not a loan against a particular car. The lender decides what the money can be used for, and you repay it over an agreed term. It can fund a vehicle, but it can just as easily pay out other debts, which is where debt consolidation comes in.
Debt consolidation
Consolidation uses one new loan to pay out several existing debts, such as credit cards, store cards and other personal loans. It can simplify your repayments and sometimes lower them. The catch is the term: spreading debts over a longer period lowers the repayment and can raise the total interest. So we compare what you would pay on your current debts with what you would pay after consolidating, including any fee to close the old accounts, and we ask what happens to those accounts once they are paid out.
Moving the debts into a home loan can lower the repayment further because the debt is spread over a longer term, but it can also mean paying interest for longer. We show it beside a personal loan rather than assuming either is the answer, and if a change to your home loan is on the table, our refinancing page covers it.
If you are already behind on repayments, ask your current lender whether hardship arrangements are available before borrowing more. A new loan is not always the answer.
What to compare before you sign
The repayment is the number a quote tends to lead with, and on its own it says little about what a loan will cost. Ask each lender, and the dealer, for the items below.
Total cost and comparison rate
Ask for the total amount payable over the whole term, in dollars, with fees included. A longer term lowers each repayment and raises the interest across the loan, so the smaller repayment can be the more expensive loan. Our loan repayments calculator shows the total interest and total repaid for the amount, rate and term you enter, before fees. Results are estimates only; a lender’s assessment sets the real number.
A comparison rate folds the interest rate and most fees into one annual figure, so it is a fairer starting point than the advertised rate. It is worked out on a standard loan amount and term, so your own loan can differ.
Fees and early repayment
Look for establishment fees, ongoing account fees, and any fee for extra repayments or paying out early. Extras or charges added to the loan at the dealership can be borrowed at the same rate as the car. If you might change the car before the term ends, the cost of leaving early can matter as much as the rate.
Term against the life of the vehicle
It helps to choose a term that ends well before the vehicle needs major work or replacing. If the loan outlasts your time with the car, there can be a stretch where you owe more than it is worth, which can become a problem if it is written off or you want to change it.
The vehicle as security
Each lender sets its own limits on the age and type of vehicle it will take as security, so a lender can be comfortable with you and still decline the car. Before you pay a deposit, search the national Personal Property Securities Register (PPSR) to see whether finance is already registered against it.
The order of your applications
When a lender checks your credit file for an application, the enquiry is recorded whether or not the loan is approved, and several close together can look to the next lender like you are urgently seeking credit. So choose the lender before anything is lodged, rather than applying at the dealership, then at your bank, then somewhere else. Ask a dealer how many lenders they will send your details to before you agree to see what they can arrange.
When to talk to us first
- You are buying from a private seller, or the vehicle is older or unusual, and you have not paid a deposit yet.
- A home loan, refinance or pre-approval is likely soon. A car loan counts as a debt in later assessments, and lenders can see how recently you applied.
- Your credit file shows a default, a missed repayment or a recent declined application, and you want to understand how a lender may view it before you apply.
- Your income comes from a business, an ABN or irregular work, which lenders can assess differently from a regular payslip.
- You want to consolidate debts and are not sure whether a personal loan or your home loan is the right place for them.
Have the vehicle details, a list of what you owe and your income details to hand, then book a consultation or contact us.
Oakwood Finance Pty Ltd is a Credit Representative (561236) of Finsure Finance & Insurance Pty Ltd, Australian Credit Licence 384704. Oakwood arranges credit through its lending partners; all lending is subject to lender assessment and approval.
The right car loan is often not a car loan
Dealer finance is convenient. Before you sign anything in a showroom, it is worth knowing what the alternatives would cost over the whole term, because the total can differ from one offer to the next.
Personal, secured, or against the house
A secured car loan takes the vehicle as security, which a lender may take into account when it sets the rate. Compare the total cost of each option before you choose.
An unsecured personal loan can cost more, but it leaves the car unencumbered, which can suit older vehicles, private sales and anything a lender will not take as security.
Adding it to the mortgage can come with a lower headline rate, but spreading a car loan over a long mortgage term can cost more in total interest, and the car loses value long before the debt is gone. If you use equity, we can ask the lender about a separate split on a shorter term, so the debt is paid off within the life of the vehicle. The lender decides whether that is available.
If the car is for business
A chattel mortgage, lease or rental can change what you can claim and how the asset sits on your books. Those are tax questions before they are lending questions, and your accountant should answer them, but the finance has to be set up to match, so tell us which way you are going before an application goes to a lender. See asset and equipment finance for the business side.
What can affect the rate
A lender may look at your credit file, the age of the vehicle, whether it is a dealer or private sale, and the term. A balloon payment can lower the monthly figure, but it can raise the total cost and leaves a lump sum due when the car may be worth less. We can ask the lender to show the figures with and without a balloon, so you can see the trade rather than just the monthly number.
An illustrative worked example
An illustrative example of how a file like this can be approached. It is not a client outcome, and no result is implied. This is general information only, not credit assistance, a quote or a recommendation. Every structure depends on individual circumstances, lender credit policy and approval. Oakwood arranges credit through its lending partners; all lending is subject to lender assessment and approval.
Worked example · Replacing the family car
Comparing the ways to fund the car, not just the monthly repayment
Structure to consider: a secured car loan compared with a mortgage split and with dealer finance
The situation. A couple with a mortgage and some equity needs to replace an ageing car, and has been told by their bank to top up the home loan against that equity.
The complication. A top-up can carry a lower headline rate and, depending on how the couple actually repay, can end up costing more in total: if they do not intend to pay the extra off early, the cost of the car can sit on the mortgage for the whole remaining term. The dealer’s offer is convenient, and its total cost would need to be compared before signing.
What we would look at. Pricing it three ways: dealer finance, a separate mortgage split on a short term, and a standalone secured car loan. We would show the total cost of each rather than the monthly repayment, and what each does to the equity the couple may want available for something else.
What the example shows. The option with the lower headline rate is not always the one that costs least in total, which is why the comparison is on total cost. Whether a lender will provide any of these options, and on what terms, is for the lender to assess.
The business-buyer guide
Our equipment and vehicle finance guide covers the business side: chattel mortgage against lease against rental and what each does to your books, how some lenders assess a business on its ABN and GST history, and what documents a lender may ask for. It is written for business buyers rather than private ones, so if you are buying a family car, the sections above cover you.
Get the equipment and vehicle finance guide
Buying through a business? See also our commercial finance range.
Related reading: Turn Your Dreams into Reality with a Personal Loan.