Looking for an affordable car loan interest rate?

The world of lending and car loans can be especially confusing. There are several things you need to keep in mind when searching for affordable car loans. The car loan interest rate is one of the most important factors that will contribute to the overall cost of your loan. If you don’t know how an interest rate works, you don’t need to stress, you’re certainly not alone. Fortunately, they’re pretty simple to understand. That’s why we’ve made this easy-to-follow guide on understanding car loan interest rates. We’ll cover what an interest rate is, the difference between fixed and variable interest rates, and how to apply for Pocket Cash’s lender finding service. 

What is a car loan interest rate

An interest rate on a car loan is a percentage of the principal amount that is added on top of your loan. For example, if you borrow $10,000 with an interest rate of 20% over the term of two years, you’ll be required to repay approximately $14,000. The interest rate charged on any kind of loan, including the car loan is described on an annual basis and is generally expressed as the annual percentage rate (APR). 

Fixed vs variable interest rates

There are generally said to be two types of interest rates: Fixed and variable car loan interest rates. Although it sounds confusing, both rates are quite easy to understand and can help you calculate what you’ll pay overall for your loan. We’re gonna walk you through what they mean in simple terms. 

Fixed interest rates

A fixed interest rate simply means that the interest rate on your car loan won’t change over the course of your loan term. The majority of lenders will provide fixed internet rates. The benefit of these rates is that you can calculate what the overall cost of your loan will be before you apply for it. This means you can budget according to what your monthly repayment will be. 

Variable interest rates

A variable interest rate, on the other hand, fluctuates depending on market rates. This type of car loan interest rate has both its pros and cons. If the rate decreases, you could get a good deal on your loan, where as if it increases, you could end up paying more than you budgeted for. 

Secured vs unsecured car loans

Aside from your car loan interest rate, another important factor that needs to be considered is secured vs unsecured car loans. 

Secured loan

A secured loan requires collateral. Collateral needs to be an asset of value that you can attach to your loan in the event you’re unable to repay the money. When securing your car loan, generally, your lender will require you to use the car you are purchasing as collateral. There’s no need to be concerned about having your car repossessed. This is usually only a last resort for most lenders. If you’re in financial hardship, your lender could help you out by reducing your monthly repayments to an amount that is more manageable for you.

Unsecured loan

An unsecured loan, well you guessed it, doesn’t require any sort of collateral as security. These loans are usually approved for smaller amounts of cash. From the perspective of a lender, smaller amounts of cash are less risky, in the event, you can’t afford the repayments. Although unsecured loans might be easier and quicker to apply for, they can have higher interest rates due to the higher risk.

How can my credit score affect my interest rate 

Whether it be buying socks or groceries, we, as humans are always hunting for a bargain. Therefore, it should come at no surprise that we want the lowest possible interest rates when applying for a car loan. Your credit score is one of the biggest factors that will affect what interest rate you’re offered by your lender. These days, there are several lenders on the market that can offer loans to people with bad credit. However, if you have a less than perfect credit score, your chances of accessing the lowest interest rates will be damaged. You can access a free annual credit report from the following credit agencies: Illion, Equifax, Experian. 

Car loans with Pocket Cash

At Pocket cash, we’re the lender finder you didn’t know you needed! More and more Aussies are using our online service to find affordable car loans. What’s a lender finder? Essentially, we do the searching for you. no more trawling through pages and pages or Google results to find the best car loan interest rates. Simply apply with Pocket Cash and we’ll show your application to a number of lenders in order to find you a suitable match. This way you can get a higher chance of approval without having to submit a million applications! 

Am I eligible to apply? 

We want to make applying for car loans accessible to as many Aussies as possible. So, to apply for Pocket Cash’s lender finding service, you’ll just need to meet a few basic eligibility requirements.  You must: 

• Be 18 years or older;
• An Australian citizen or Permanent Resident;
• Have a regular income deposited into a personal bank account for the last 3 months;
• Have an Australian drivers license;
• Have internet banking set up;
• have an active mobile number and email address.

What documents will I need? 

Pocket Cash online service is 100% online. And when we say 100% online, we mean it! That means no printing out unnecessary paperwork. All documents are to be submitted online. We recommend having the following details handy before you apply, so you can breeze through the application: 

• Online banking details; 
• An active email address and mobile number;
• The reason you are applying for the loan; 
• Your MyGov details (if you are receiving Centrelink payments);
• Employer and contact details.

Can I apply for bad credit car loans? 

You sure can! At Pocket Cash, we don’t believe a mistake you made up to 7 years ago necessarily represents how you are with money today. We, along with several online lenders treat your credit history as exactly that- history! That’s why, despite your bad credit,  we show your application to a number of lenders to give you the best chance of approval. 

Of course we can’t guarantee every applicant that they’ll be approved for a bad credit loan. Pocket Cash finds lenders who adhere to responsible lending practices. This means they won’t lend to anyone who cannot comfortably afford the repayments on a loan. The aim is to help you out financially, not make you worse off. 

Another point worth considering is that, if you have a bad credit score, the car loan interest rate you receive could be higher than usual. If you’re looking for ways to improve your credit score, visit the Moneysmart website. 

Will Pocket Cash conduct a credit check

In short, no. Pocket Cash will not conduct a credit check. This is because we are not the ones lending the money. Our role is to find you a lender who is willing to give you a car loan with an affordable car loan interest rate. Although we cannot speak on every lender, it is part of responsible lending guidelines to conduct a credit check on a loan application. This means, although we won’t conduct a credit check, the lender we will potentially find you, will. 

How it works 

Are you ready to apply for a car loan through Pocket Cash? Great! We just have a few simple steps you’ll need to follow and you could be on your way to accessing a competitive car loan interest rate! 

Step 1: Apply online

To begin your application, scroll up to the top of this page and click the ‘Apply Now’ button. You’ll then be required to choose a loan amount from $5,000 to $35,000 and a repayment period. Once you’re happy click ‘Next.’

Step 2: Fill out the application 

Next, you’ll be taken to our 100% online application form. Here you’ll be asked to fill out some basic personal and financial information. Make sure you answer each question as honestly and thoroughly as possible. Once you’ve filled in all of the required fields hit ‘Submit.’

Step 3: We’ll do the searching

The Pocket cash team will show your application to a number of lenders to give you the best chance of approval. If you apply during regular AEST business hours, then we could have an outcome for you in just 60 minutes! 

Step 4: Meet your lender

If Pocket Cash has found you a suitable lender, we’ll put you in touch with them ASAP. Your lender will then conduct a proper assessment of your application. This will most likely include a credit check. If they are able to provide you with a car loan, they’ll send over an agreement for you to review and sign. We recommend reading the terms and conditions thoroughly to make yourself aware of the car loan interest rate and any fees or charges that apply. Once you’re happy, sign your agreement and send it back to your lender. 

Step 5: Get your cash

Once your lender receives your signed copy of your loan agreement, they will send you your cash straight away. In most cases, you could have your cash in just 60-seconds thanks to the introduction of instant banking!

Think you’re ready? Scroll up

If you’ve been searching the web for a reliable lender, but haven’t had any luck, Pocket Cash could be your guy! We can do the searching for you to give you the best chance of approval and find you an affordable car loan interest rate.

Got questions? Head to our FAQ page for answers! Alternatively, you can get in touch with The Pocket Cash team for more information. 

Use a car loan repayment calculator to estimate your monthly repayments.

*If you have an NPP-enabled bank account