Personal Loans

Personal loans are much the same as vehicle loans but without the security involved, and as you can guess, being unsecured attracts a higher rate of interest. It is only issued and supported by the borrower’s creditworthiness, rather than using their property as collateral. Personal loan terms are similar to vehicle loans, though a shorter term is normally better. There are also no residual “balloon” payments available with personal loans.

With fixed personal loans, there is often little or no benefit in paying them out early or making additional repayments, as the interest is usually charged upfront and applied to the account when the loan settles. With variable rate loans, additional repayments and lump sums can help you save money and exit the loan faster than the original term.

Vehicle Loans

Whether fixed or variable, we have a number of lending options available for vehicle finance. A vehicle can include classic cars, motorcycles, boats, caravans and RVs. They normally run over a term of 5 years but can be lengthened to 7 years by a few lenders. You can also have residual or balloon payments at the end of the term which may make the repayments cheaper, but could cause issues at the end of the loan term if not correctly accounted for.

Many people get carried away with the low interest rate on vehicle loans, assuming cheaper is better. This is not necessarily the case, as a lower rate will make repayments cheaper, but the pace at which you pay a vehicle loan off greatly offsets the interest charge. More often than not the loan’s associated fees will have the biggest impact on the overall pricing and end rate of the loan. Always find out how much you are paying for brokerage or enquire what the delivery rate (inclusive of fees and charges) is, as opposed to the advertised rate.

Vehicle loans are normally secured against the vehicle, with rates relating in most cases to the vehicle’s age and value, and the financial situation of the borrower.