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What Is a Car Loan?
A car loan is a secured or unsecured loan designed to finance the purchase of a new or used vehicle. Borrowers repay the loan in fixed monthly instalments, with interest applied over the loan term.
How Car Loans Work
Car loans can be secured (using the vehicle as collateral) or unsecured (requiring no asset backing). Secured loans generally have lower interest rates due to reduced lender risk. Loan terms typically range from 1 to 7 years, and interest rates vary based on credit score, loan amount, and lender policies.
Benefits of a Car Loan
Financing a car purchase through a loan offers several advantages, including:
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Affordable monthly repayments – Spread the cost of your car over time.
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Fixed or variable interest rate options – Choose between stable or flexible repayments.
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Faster car ownership – Get the vehicle you want without waiting years to save.
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Improve credit score – Making regular repayments strengthens your credit profile.
With a well-structured car loan, you can enjoy the benefits of vehicle ownership while maintaining financial flexibility.
Compare the Best Car Loan Rates with Expert Brokers
At Freedom Mortgage Solutions, we work with over 30 lenders to secure low-rate car loans with flexible terms. We help you find the best new or used car loan with the most competitive interest rates and repayment plans.
Fast Approvals & Hassle-Free Applications
We streamline the entire loan process, from application to approval, ensuring you get your car loan approved quickly and stress-free. Our team negotiates with lenders to secure the best possible deal based on your financial profile.
Types of Car Loans Available
There are several financing options for car buyers in Melbourne:
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Secured Car Loans – Lower interest rates with the car as collateral.
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Unsecured Car Loans – No collateral needed but higher interest rates.
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Fixed-Rate Loans – Predictable repayments over the loan term.
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Variable-Rate Loans – Interest rates fluctuate with market conditions.
Choosing the right loan type ensures affordable repayments and the best long-term savings on your car purchase.
Who Can Apply for a Car Loan?
Car loans are available to:
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Salaried and self-employed individuals with stable income
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Borrowers with good credit history (for the best interest rates)
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First-time car buyers or those upgrading their vehicle
Lenders assess income, creditworthiness, and existing financial commitments before approving a loan. Our team helps you find a lender that matches your needs.
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FAQ
Car loan amounts typically range from $5,000 to $100,000, depending on the borrower’s income, credit score, and lender policies. Secured loans may offer higher borrowing limits and lower rates compared to unsecured loans.
A secured car loan uses the vehicle as collateral, resulting in lower interest rates and higher loan amounts. An unsecured car loan requires no collateral but often comes with higher interest rates due to increased lender risk.
Car loan approvals typically take 24-48 hours, depending on the lender and applicant’s financial profile. Some lenders offer same-day approvals, especially for borrowers with strong credit scores and stable income.
Yes, some lenders offer bad credit car loans, but these usually come with higher interest rates and stricter repayment terms. Working with a mortgage broker helps find the best available options and improve approval chances.
Most lenders allow early repayments, but some may charge exit fees or penalties for early payoff. Checking the loan terms before signing ensures you get the most flexible repayment structure.
Freedom Mortgage Solutions welcomes your enquiry. To book an appointment or simply ask us a question, fill in your details and we'll be in touch soon!