A secured loan might just be the horsepower you need to get a motor vehicle loan.

Learn more about secured loans for cars, bikes, boats and caravans, before u loan.

Whether you’re buying a car, bike, boat or caravan, you will need to decide between a secured or unsecured loan. Here, we look at what a secured loan is.

What is a secured motor vehicle loan?

A secured motor vehicle loan is a type of loan where the vehicle itself acts as collateral for the loan. In other words, your shiny new ride is used as security to protect the lender in case you can't repay the loan. These loans are commonly used for purchasing cars, motorcycles, boats, and caravans.

The way a secured loan works is quite simple. You choose your desired vehicle, and the lender provides the funds to purchase it. The lender holds a legal interest in the vehicle until you've paid off the loan. If you fail to make your payments, the lender can repossess and sell the vehicle to recoup their losses.

Secured loans are an excellent choice when buying a car or any motor vehicle. They usually come with lower interest rates compared to unsecured loans because the vehicle serves as collateral, reducing the lender's risk. This makes secured loans a popular and cost-effective choice for car financing.

The need for a deposit may vary depending on the lender and your financial situation. Some lenders might require a deposit, while others may finance the entire vehicle purchase. A deposit, if required, can help reduce the overall loan amount and lower your monthly payments.

Can I get a secured used car loan?

Absolutely, you can get a secured loan for a used car. In fact, these loans are quite common. Whether you're eyeing a brand-new vehicle or a reliable used car, a secured loan can provide the financial support you need. Lenders often have specific loan products tailored for used vehicles.

Can I get a loan against my car with bad credit in Australia?

Even if you have a less-than-perfect credit score, you can still secure a loan against your vehicle in Australia. However, bad credit may lead to higher interest rates. But don't be discouraged—there are lenders and finance brokers who specialise in helping borrowers with bad credit find suitable secured loans.

Is it better to get a secured car loan?

Choosing between a secured and unsecured car loan largely depends on your financial situation and risk tolerance. Here are a few reasons why a secured car loan might be better for you:

  • Lower interest rates – Secured loans typically come with lower interest rates due to the collateral, which can lead to significant savings over the life of the loan.
  • Flexible loan terms – Secured loans often offer more flexible terms, allowing you to tailor the loan to your financial goals.
  • Easier approval – If you have a less-than-perfect credit history, securing a loan with collateral can increase your chances of approval.
  • New or used vehicles – Secured loans work for both new and used vehicles, offering you versatility in your vehicle choice.

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