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Car Loans Explained

Buying a car can be expensive, if you are buying a new car, dealers will usually offer finance which can be very expensive in terms of interest. A cheaper alternative to dealer finance is taking out an independent car loan.

Banks which offer car loans lend you money to buy the car and spread the repayment of the debt over a term of your choice.

Regular Personal Loans Vs Car Loans

There are two types of debt that can be used to finance the purchase of a new car. One way is to take a regular personal loanand spend the cash the bank lends on purchasing a new car. Secured personal loans tend to offer lower rates of interest than unsecured personal loans.

Specialist car loans lend the borrower cash to finance the purchase of a car and secure the debt against the car itself rather than the borrower’s house. This means borrowers who fall behind on their car loan repayments may have their car repossessed.

Specialist car loans offer flexibility allowing the borrower to defer payments if necessary or structure the debt so they pay lower amounts initially followed by a lump sum payment at the end of the term loan.

Latest Compare Loans News from the comparedinkum Blog

Interest-Only-Borrowers Could Be In For A Hard Time

If you are interest-only-borrower, then you have had a difficult year. Not only has APRA cracked down on these kinds of loans but according to the latest research from Morgan Stanley, interest-only-borrowers are more likely to make poor financial decisions and pose a risk to their lenders. The research suggests that interest-only-borrowers have a higher chance of descending into debt and losing their savings if a high cost emerges. They are also likely to sell their property if interest rates rise which means they carry a high financial risk. Continue reading

Australian Banks Starting To Cut Fixed Interest Mortgage Rates

Many Australian banks have hiked rates on their interest-only loans recently, however that trend seems to be reversing with CBA joining a group of banks and cutting fixed rates on interest-only loans. The cut in interest rates applies only to CBA’s Fixed Wealth Package and Fixed Rate Home Loan products for both owner-occupiers and investors. Recently ANZ also cut its two-year fixed rate on interest-only loans by 10 basis points. The lender also increased the rate for principal and interest loans. Continue reading

Banks Cut Home Loan Rates

A number of banks have cut their headline mortgage rates for fixed and variable home loans for owner occupiers in advance of what is expected to be an extremely busy season for the property market this spring. For customers seeking out a low rate variable home loan, the biggest changes last month came from Greater Bank which slashed its rate by 15 basis points to 3.84%. Bank of Queensland followed suit by cutting its rate by 10 basis points to 3.79%. Continue reading

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