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As a Perth finance broker, we get this question every day. The truth is, car loan interest rates in Australia can vary widely depending on your situation, your lender, and the type of loan you choose.
In this guide, we’ll break down the key factors that affect your interest rate and how working with the best finance broker in Perth can help you secure the most competitive deal.
1. Your Credit History
Your credit score is one of the first things lenders look at. A strong credit history usually means access to lower rates, while missed payments, defaults or too many recent enquiries can push your rate higher.
Tip: Even if your credit isn’t perfect, a broker can often connect you with lenders who specialise in helping clients with average credit.
2. Employment and Income Stability
Lenders want to know that you can comfortably repay your car loan. Being employed full-time with a stable income is ideal, but contractors and self-employed people can still get car loans. You may just need to provide extra documents such as tax returns or BAS statements.
Tip: The more consistent your income looks on paper, the stronger your case for a lower rate.
3. Loan Amount and Term
The size of your loan and how long you borrow for both affect your interest rate. In general:
- Larger loans can be seen as higher risk to the lender which may mean higher rates.
- Longer loan terms give more time for risk so rates can be slightly higher compared to shorter terms.
Tip: Borrow only what you need and consider a shorter term if you want to reduce the overall interest paid.
4. Secured vs Unsecured Car Loans
- Secured car loans: The car is used as security for the loan. This lowers the lender’s risk and usually means lower interest rates.
- Unsecured car loans: No asset backing the loan. This increases the risk so interest rates are generally higher.
Tip: Most car loans in Australia are secured but knowing the difference helps you make the right choice.
5. The Car Itself
Yes, the vehicle you choose can affect your interest rate too. New cars are considered less risky than older cars so lenders often offer lower rates for brand-new vehicles compared to used ones.
Tip: If you’re financing a second-hand car, make sure it meets lender requirements around age and condition.
6. The Lender You Choose
Not all lenders are the same. Banks, credit unions and specialist finance companies all have different policies, products and rates. This is where using a Perth finance broker makes a big difference because we compare options across multiple lenders so you don’t have to.
Why Work With a Finance Broker in Perth?
Getting the lowest possible car loan interest rate isn’t just about ticking the right boxes. It’s also about knowing which lender is the best fit for you. As one of the best finance brokers in Perth, Hanna Lending:
- Shops around on your behalf
- Matches you with the right lender for your circumstances
- Helps you avoid unnecessary credit enquiries that can hurt your score
- Speeds up the approval process so you can get on the road faster
- Provides personalised support at every step
The Bottom Line
Your car loan interest rate in Australia depends on a mix of factors including your credit history, income, loan size, loan term, whether it’s secured or unsecured, and even the car you choose.
The good news is you don’t have to figure it all out on your own. Working with a trusted Perth finance broker gives you the best chance of securing a competitive rate that fits your budget.
At Hanna Lending, we make car finance simple, transparent and stress-free. With more than 250 five-star reviews, our clients know we deliver results.
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