Car loans vs personal loans
Wondering which road to take? We can help.
03 June 2020
As the end of financial year sales begin, you may be considering snapping up a car yard bargain. But before you start dreaming about leather interiors and built-in GPS systems, it’s important to consider your finance options.
Here are some points to consider if you’re weighing up whether a car loan or a personal loan is the best option for you.
With quick approvals and competitive interest rates, a car loan can be a great way to get you on the road.
Car loans are secured, which means that the vehicle is used as collateral against the loan. As this reduces the risk to the lender, you may be eligible for a lower interest rate.
It’s also important to keep in mind that most car loans have fixed interest rates. This can mean that if you decide to pay out the loan early, you could be up for some exit costs.
Personal loans are often used to fund holidays or weddings, but they can also be used to purchase a car.
Unlike car loans, personal loans are generally unsecured, so can be a quicker option as you don’t need to put up the car as collateral. However, as this option provides less security for the lender, you may incur a higher interest rate.
One benefit of a personal loan is that you have more flexibility with the funds. Once you’ve bought your car, you can use any remaining funds on car accessories or something else you have your eye on.
Get expert help
When deciding between a car loan and a personal loan, it’s important to consider the pros and cons and think about what suits your situation best.
A finance expert can help you make the right choice, so reach out to a Liberty Adviser today.