Car loans in Australia 2026

Comparing car loans in Australia

A car loan is a secured or unsecured personal loan used to buy a vehicle. Most lenders offer secured car loans, where the car itself acts as security, which typically means a lower interest rate. If you default, the lender can repossess the vehicle.

Loan amounts range from around $5,000 up to $150,000 depending on the lender. Terms typically run 1 to 7 years. Shorter terms mean higher monthly repayments but less total interest paid.

New vs used car loans

Lenders often separate new and used car loans. New car loans usually attract a lower rate because the asset holds its value better. Used car loans may have restrictions on vehicle age, typically no more than 7-10 years old at the end of the loan term.

What to compare

• Comparison rate. This includes the interest rate plus most fees. Use it rather than the advertised rate when comparing products side by side.
• Balloon payment. Some lenders offer a balloon option, which reduces monthly repayments but leaves a lump sum due at the end. Factor this in.
• Early repayment fees. If you plan to pay off the loan ahead of schedule, check whether the lender charges a penalty for doing so.
• Loan term. A 3-year term costs less in interest than a 7-year term but the monthly repayment is higher.

Who can apply?

Most lenders require you to be at least 18 and an Australian citizen or permanent resident with a regular income. A good credit score helps. Some lenders also consider applicants with bad credit, but expect a higher interest rate.