We’ve all been in a tight jam where a bit of extra cash would fix it all. If rego’s due, or you’ve been hit with an unexpected car repair bill with no payday on the horizon, the solution could be sitting in your driveaway. Getting a loan against your car can be a great way to secure your loan and get the cash you need, even if you’ve got bad credit.
When looking at options to take out a loan against your car, it is important to research what different lenders provide. Make sure you check their eligibility criteria, interest rates and borrowing amount to find the best option for you. This blog will help share more information about secured loans and how to get a loan against a car.
Overview:
- What does it mean to get a loan against your car?
- What are the benefits of getting a loan against your car?
- Steps to getting a loan against your car
- Can you get a loan against a car and still drive?
- Loan against an already owned car
- How much can you borrow from a secured loan?
- What is the interest rate for a secured loan?
- Are secured loans easier to get?
- Who is eligible for a loan against a car?
What does it mean to get a loan against your car?
A loan against your car is simply a secured loan that uses your car as collateral. Having a secured loan with collateral gives you access to finance you might not be approved for without some extra reassurance. But it also means if you default on your loan or miss too many repayments, the lender can repossess your vehicle to recover the outstanding debt.
Sometimes you can get finance against a car to purchase a new or used vehicle where the lender or dealership retains security in the vehicle until the loan has been repaid. Other lenders, like Swoosh, let you use a vehicle you already own as collateral for a secured personal loan that you can use for anything from dental bills to debt consolidation.
For more information, check out our guide Loans Against Cars: Everything You Need To Know.
What are the benefits of getting a loan against your car?
The biggest benefit of getting a loan against your car is that it gives you access to funds you might not have been eligible for otherwise. Since you’re using an asset as collateral, lenders will be more inclined to offer you better interest rates, terms, and conditions. It’s a way to level the playing field and give everyone a fair go, regardless of your credit score or past financial circumstances.
However, securing a loan with an asset always carries the risk of losing whatever asset you’ve used as collateral. It’s important to think about whether you feel comfortable risking your car if you can’t make repayments.
Steps to getting a loan against your car
The exact process will depend on which leader you choose. Generally speaking, here at the 5 steps of getting a loan against your car:
- Research and choose a lender – there are many lenders in Australia who do loans against cars. Make sure you check terms, conditions, and any additional fees before deciding.
- Check eligibility – different lenders may have different criteria required to work with them.
- Complete loan application with documents – these days, most banks and lenders offer an online application.
- Follow up on any additional documents or information if needed – it’s important to share everything the application asks for, as this will allow you to get your loan quicker.
- Sign documents – once your application has been approved, you will receive a document to sign saying you agree to the loan repayments, terms, and conditions.
- Get paid – after this you will receive your loan and begin the repayment process.
Can you get a loan against a car and still drive?
Check with your lender first before you decide to use your car as collateral for the loans, as some lenders may have different terms and conditions. Here at Swoosh, we won’t lock up your car or keep you from driving. We understand many people need vehicles to get to work, school, or any number of commitments.
In fact, some people need loans to help pay for emergency breakdowns or unexpected car repairs, which wouldn’t be helpful if we kept you from driving until the loan was paid off. That’s why we allow you to get a loan and still drive your car while the loan is active and you are following up with the repayments.
Loan against an already owned car
It is possible to get a secured loan against a car you already own. Generally, lenders will assess the car’s value to determine if you are eligible and how much you can borrow. With Swoosh, you can apply for a small loan against a vehicle that’s registered in your name to access some extra cash when you need it.
How much can you borrow from a secured loan against your car?
How much you can borrow will depend on which lender you choose, the value of your vehicle, and your financial situation.
Swoosh offers loans against cars from $2,300 to $5,000.
Can you pay a secured loan off early?
You can pay off a secured personal loan early, but, depending on the lender and fees set out in your loan agreement, there may be additional fees you will need to pay. Swoosh Finance does not charge any early repayment fee, so you can pay your loan off at any time without any extra costs.
Can you get a loan against a car with no credit check?
Most responsible Australian lenders will perform a credit check as part of their assessment process. While it is possible to get a loan without a credit check, these loans are usually for small amounts and come with high interest rates.
Can you get a loan against a car with bad credit history?
With Swoosh, it’s completely possible to get a loan against your car even if you’ve got bad or no credit. Bad credit doesn’t always mean someone’s bad with money. Any number of circumstances can cause bad credit, from a one-off incident to a few years of hardship. At Swoosh, we think you’re more than your credit score. That’s why we focus on the present, not the past, taking into account your current financial situation to see if you meet our eligibility criteria.
Swoosh does not offer no credit checks loans however, we do offer loans for bad credit history.
What is the interest rate for a secured loan?
Interest rates for secured loans vary depending on the lender, but they are generally lower than unsecured loans due to the collateral attached to the loan.
Interest for Swoosh secured loans is calculated daily based on the outstanding balance. Our rates and fees always include the interest rates that are fixed for the loan term — so you know exactly what to expect. If a scheduled payment is missed or returned unpaid, we may issue a $39.95 debit dishonour fee.
- Annual Interest – 47% (Comparison Rate 66.0347%)**
- Interest rates are fixed for the loan term and are based on the outstanding balance.
- By dividing the annual interest rate by 365, the daily interest rate is determined.
- Comparison rates vary from 65-66% depending on the size of the loan
If a scheduled payment is missed or returned unpaid, we may issue a $39.95 debit dishonour fee. This may affect the length of your loan and therefore change your loan cost.
Are secured loans easier to get?
Typically secured loans are easier to get than unsecured loans. This is because using your car as collateral reduces the risk for the lender if you fail to make repayments and default on your loan.
Who is eligible for a loan against a car?
All lenders have different terms, conditions, and eligibility requirements when it comes to their loans and lending processes. Swoosh keeps things simple with just 4 criteria for you to be able to apply for a loan:
Think a loan against your car is the way to go? Swoosh has you covered!
Hopefully this blog has answered some of your questions when it comes to getting a loan against a car. If you want to ask more questions about loans against cars, our friendly team is always happy to help.
Need to get cashed up ASAP? With our 100% online application process, it’s quick and easy to apply today and get the ball rolling.
