If you’re looking to borrow money to buy a car, a secured car loan means using the car you’re buying as collateral to secure more flexible loan terms. For example, if you wish to buy a car, but can’t afford to pay the full amount, then by using your car as collateral you might be able to afford to borrow the rest of the money. Offering your lender that security means they should be able to offer:
- Lower rates than if the loan were unsecured
- Flexible terms
- Faster approval
At Greater Bank, we want to offer a loan that is right for you. Use our repayments calculator to help work out what loan terms suit you, so that you can make an informed decision. If you’re still unsure, call us on 1300 763 272 to speak with one of our friendly customer service operators or visit your local branch to speak to an expert today.
What is the difference between secured and unsecured personal loans?
While a secured loan requires collateral, an unsecured loan does not as they offer lines of credit.
While secured loans present a lower credit risk to lenders, as there is always the option of recouping money lent using the collateral offered as security, unsecured loans are riskier for lenders as there is no collateral. This usually translates into different interest rates offered by lenders for secured and unsecured loans. Secure loan rates are usually lower, due to the lower credit risk involved, and unsecured loan rates are usually higher.
How does a secured loan work?
The most popular secured loans are home loans and car loans; however, there are other types of secured loans for business or personal use.
When taking out a secured loan, most lenders will require you to fill in an application form with details of the loan you wish to take out, why you wish to take it out and information regarding your personal financial situation. This will help lenders gain a better understanding of what you can afford to repay, so you can find the right loan terms to suit you.
Greater Bank offers personal secured loans to fit your needs to help you reach your goals. To find out more click here.
This article is intended to provide general information of an educational nature only. This information has been prepared without taking into account your objectives, financial situation or needs. Therefore, before acting on this information, you should consider its appropriateness having regard to these matters and the product terms and conditions. Terms, conditions, fees, charges and credit criteria apply. Information in this article is current as at the date of publication.