• Sydney Chic

Weighing up Car Loan Options


Car loan options Australia

Getting a car is a big investment and for many, it means applying for a loan to help with paying for the car. Not everyone has the capacity to make a large purchase like buying a car with cash on hand. In fact, even if you did have the assets to purchase a vehicle outright, you might prefer to leave the money in the bank as a safety net for unforeseen circumstances such as in recent times with COVID19 resulting in people losing their jobs or businesses.


One of the benefits of having a loan is you can pay it off at your own pace. With so many financing options and car loans on the market, you might find it difficult to settle on one. For many, it’s a reason to look up a car loan calculator and decide which of the loans on the market are best suited to you.

How is repayment calculated?

There are five fixed variables when it comes to your car loan. There’s the total amount of the loan, the down payment, interest rate, repayment frequency, and the loan term. Each of this determines the total amount that you pay back, including interest. It goes without saying that the longer the loan term is, the more interest you will be generating. With a loan calculator, you’ll be able to gauge exactly how much is spent on interest alone.


The calculator can only approximate for fixed rate loans. If you’ve applied for a variable rate loan where the repayment rate is dependent on the loan market, the calculator will not be of much use to you.

What types of loans are there?

Perhaps now the question you’re asking is how many types of car loans are there? As mentioned, there’s the variable rate loan which is much more flexible in the sense that you’re able to withdraw funds after you’ve begun making repayments. You also have the option of making additional payments to pay off your loan in a shorter amount of time. It sounds great but the drawback is that the interest rates can be unreliable. With fixed rate loans, you don’t have to worry about the loan economy taking a turn for the better and boosting the interest rates. However, this also means that there’s a chance of the interest rates going down in your favour so you may pay less. The question you should be asking yourself here is if you’re willing to (and if you’re financially stable enough to) take a risk.

Is there anything else I should consider before taking out a loan?

Before taking out a loan with any bank, make sure you’re aware of any hidden fees. Paying off a loan too quickly can result in an ERC (early repayment charge). Find out from your loan provider whether there are any fees that you should be made aware of. Among those are also exit fees and late fees. Requesting a digital statement can also waive the fee for a paper account statement.