car loans

sawtell

sawtell

The Great White Rooks Hunter
Hello all, not really a great place to ask this, and i have been searching the internet, but i am not to good with it all.. i struglle to understand a few basic points, which im sure a few knowledgable people on here can help me with, and the question will as normal give a few people who have no idea what they are own about to talk shit.


ANY WAY.

I would like to get a car loan, only of about 5k, I would like the loan over say 3 years (when i would expect to buy a new car)..
now according to "aussie", with a 5k loan being payed of over 3 years at 12.45 percent i would be paying about 40 dollars weekly, and over the loan period total interest of about a grand.
the weekly repayments are set for the period of the loan, and take into account total interest.

.. my question is, is there any personal style loans, which allow me to pay it of as i wish, say set weekly repayment at 50 dollars. as that tie's in with my weekly budget with my minimum work hours.
The thing with my work is, once every few weeks i may earn ALOT more, meaning i could afford to pay say 300 dollars that week. obvioulsy making the duration of the loan smaller.

in summary, this is my problem, by my knowledge of the loans i have looked at (just two, westpac and aussie), the interest (and weekly payments) is calculated using the total amount you have borrowed over the set time, the interest is then added to the amount loaned, and the weekly repayments worked out...
This does not allow me to pay it of quicker, therefore meaning less interest to pay.

Is there a magical loan that allows me to do that?

as you can tell, i really know nothing about loans, this being my first one. and it is surprisingly hard to find a internet site that explains it all, they are all just full of spam.

cheers, alex.
 
downhiller_1

downhiller_1

Likes Bikes and Dirt
i dont know if this helps you but try get a loan off your old lady and man... thats what my bro did... better in the long term so you dont end up paying interest
 
sheepy

sheepy

Likes Dirt
not very knowledgeable with this but i do know with most loans there are fees to pay off a loan faster, because they dont make us much money from interest if you pay it off quicker

i was looking at getting a car loan a while back, just couldn't justify it for an amount similar to what yours is, i hate the thought of giving so much money away, better off to grit your teeth and drive a shit box while you save
 
sawtell

sawtell

The Great White Rooks Hunter
btw i should ad this 5k, is on top of about 10ish of my own. i dont mind spending the money, it just sits there earning interest haha
all my mates have been getting new cars, and im sick of mine.

and it is or will be a subaru forester. if it ends up happening... any one want a vs commo wagon on gas ;)
 
Alec McJo

Alec McJo

Likes Bikes and Dirt
downhiller_1 said:
i dont know if this helps you but try get a loan off your old lady and man... thats what my bro did... better in the long term so you dont end up paying interest
Click to expand...
Not everyones parents have 5 grand lying around ;)

From what I've been told Sawtell, any loan will allow you to do what you want to do. The only condition is that you can't pay it off in less than 12 months, but you could leave $1 left on it if you wanted to. Just the info I've been given anyway.

EDIT: So I just looked it up, and it turns out that info is correct for Suncorp. 12.38% P.A. If it's an Unsecured loan, 11.15% If it's a secured loan. A Secured loan is one that can be taken out if the cars less than 5 years old and from a dealership.

:)
 
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DJninja

DJninja

Likes Bikes and Dirt
I guess you don't have enough time to just go and see someone who does car loans and get the advice off them? My dad works for Aussie and he says that there interest rate is generally %1-2 lower than the big banks and there loans are set by fixed repayments.
Like somone said borrow of your parents if you can. Hope my shitty info helps
 
sawtell

sawtell

The Great White Rooks Hunter
DJninja said:
I guess you don't have enough time to just go and see someone who does car loans and get the advice off them?
Click to expand...

i dont go and see some body, as banks seem to look at a 19 year old, who knows nothing and probaly think lets rip him off,

asking on the internet, i get a large response from people in different area's, in different circumstance's. and have used different loans.

trust me if their was a place i oculd go to and talk to them about different companies loans and they could help me cmopare them i would.. but sadly there isnt really! .. apart from a comparison website, which do not really explain what i am asking, thank you for the help any way.
 
A

Arete

Likes Dirt
I've had 2 car loans and my honest advice would be to avoid them if you can.

However - you can get variable rate loans where you can put, and take out as much as you want (with a given limit of course). Howeve the rate is usually substantially higher than a fixed rate loan with fixed repayments.

My loan was a fixed term/payment loan. I can put up to 5Kp.a. above and beyond my regular repayments, but now I've done that I can't put any more in.
 
Breaka

Breaka

Likes Bikes and Dirt
My knowledge in this area is pretty limited but I may be able to help.

The estimated weekly/fortnightly/monthly payments which are given by the bank are minimum payments. You can nominate a higher weekly/fortnightly/monthly payment however.

From my understanding a variable rate interest loan is what you're after if you want to pay off the loan earlier than the original term. Meaning you pay x% of what you're owing + the amount that's still outstanding.

Also look at comparison interest rates ONLY. Advertised rates are completely different to what you'll really be paying once administration fees and the like are added on top. For instance St. George was offering a personal loan ~12.06% not long ago which looked pretty good but the comparison rate turned out to be something bullshit like 22%.

Check this out, this will help you find the loan you're after.

http://www.infochoice.com.au/Home/Banking/PersonalLoans/tabid/58/Default.aspx
 
M

mullan2304

Likes Bikes and Dirt
Simplest explaination.

1. Don't go Motor Finance Wizard. It's for suckers. If you don't pay it of for any reason then your interest will hit 29%

2. A personal loan from a bank is your best option.

3. A secure loan has nothing to do with where you buy your car. It just means that you have enough collateral to cover the amount of the loan should you be unable to pay. Most of the this will be your car.

4. With a fixed rate loan you can only pay roughly 10% more of the total loan amount each calender year. It varies between lender to lender

5. Variable rate loans allow you to pay of more each year at the trade of off a higher interest rate.
However there will be a clause stating that you can't pay it of within a certain amount of time. Say 1 year on your 3 year loan, otherwise you will be subject to a baloon payment. This is to cover some of the money the bank would of made from the interest.
 
wombat

wombat

Lives in a hole
top_dog said:
Coincidentally I was going to go to the bank tomorrow to apply for a loan. Can anyone see anything glaringly wrong with the NAB Tertiray student loan bearing in mind I would be paying it off within 6 months? Oh $3k also.

Info here. No fees apparently, other than $8 for a bank cheque.
http://nab.com.au/Personal_Finance/0,,82441,00.html

and here
http://nab.com.au/Personal_Finance/0,,83115,00.html?ncID=ZBA
Click to expand...
What do you want to do with it? Having inquired as to this very loan (not for myself) in the last few weeks I was made aware that you can only take out a student loan for a specific purpose (car, computer etc) and you'll need to present receipts for the purchased items to the bank. So you can't use it for unspecified living expenses whilst you're studying, and unable to work full time.

If you don't really need a deferred loan, have a chat to the commonwealth, they'll give a personal loan with a student account, waive the monthly fees are not charge any penalty for early payment (although there's no redraw offered). They also don't need to see receipts.

Of course, the above is only what I found out during enquires, best to ask for yourself of course.
 
scblack

scblack

Leucocholic
sawtell said:
I would like to get a car loan, only of about 5k, I would like the loan over say 3 years (when i would expect to buy a new car)..
now according to "aussie", with a 5k loan being payed of over 3 years at 12.45 percent i would be paying about 40 dollars weekly, and over the loan period total interest of about a grand.
the weekly repayments are set for the period of the loan, and take into account total interest.

.. my question is, is there any personal style loans, which allow me to pay it of as i wish, say set weekly repayment at 50 dollars. as that tie's in with my weekly budget with my minimum work hours.
The thing with my work is, once every few weeks i may earn ALOT more, meaning i could afford to pay say 300 dollars that week. obvioulsy making the duration of the loan smaller.

in summary, this is my problem, by my knowledge of the loans i have looked at (just two, westpac and aussie), the interest (and weekly payments) is calculated using the total amount you have borrowed over the set time, the interest is then added to the amount loaned, and the weekly repayments worked out...
This does not allow me to pay it of quicker, therefore meaning less interest to pay.

Is there a magical loan that allows me to do that?

cheers, alex.
Click to expand...
OK, here's what you do:

I have looked into exactly the same thing to buy the roadie I am looking at now. For that, I need $1,500 or so. BUT the standard personal loan is $5,000 as you say. I do not want to pay interest on $5k, just the $1.5k.

SO, you take out the loan for $5k over a three year term, with the variable interest rate so you can make extra repayments if you wish. The catch is, you cannot repay the WHOLE loan early without a sizable penalty.

You pay DOWN the loan, but not completely. If you get extra earnings any month, pay that off the loan, BUT only down to about $500 balance. This balance remains for the three years, and you pay bugger all interest on $500, so that does not matter.

This way you have the flexibility of having the three years if you happen not to earn enough for faster repayments; but you can pay the loan mostly down so you pay very little interest if you do get the extra money.


For my bike, I will take the loan for $5,000, draw it all out, pay the $1,500 for the bike, and repay next day the $3,500 so I pay interest only on the $1,500. Then set my repayments based on the $1,500 balance - if I want to pay more again I can, but must leave some balance of the loan for the full three years.

There you go, the only thing you have to remember is there has to be some balance on the loan for the full three years.
 
and1

and1

Likes Bikes and Dirt
Rather than paying off an extra few hundred here and there put it away into a high interest savings account until the end of the loan and then dump it all into the loan at once, this will avoid you paying multiple overpayment fees throughout the life of your loan.

This way your making your money earn you something as well before you give it back to the bank.

Considering you would be paying a fixed rate of $40 per week theres no penalty for paying the bare minimum.
 
scblack

scblack

Leucocholic
and1 said:
Rather than paying off an extra few hundred here and there put it away into a high interest savings account until the end of the loan and then dump it all into the loan at once, this will avoid you paying multiple overpayment fees throughout the life of your loan.

This way your making your money earn you something as well before you give it back to the bank.

Considering you would be paying a fixed rate of $40 per week theres no penalty for paying the bare minimum.
Click to expand...
The PENALTY if you do this, is the loan has interest charged at 12-14%. The bank account pays interest at 8% or so. So you lose 4 to 6% there. THEN you pay income tax on the bank account interest. So you lose up to nearly 50% there. Another 4% interest gone.

And1 - you would be paying interest on the loan of ~14%, but only receive ~4% after tax on the bank account. You lose 10% from this.

If you pay the loan down to a minimum amount, you are effectively earning 12-14% tax free.

Using the variable rate loans, you can pay any amount at any time as long as you do not repay the whole loan.
 
hardinge915

hardinge915

Likes Bikes and Dirt
I looked into this a while ago about getting a loan for a new car. The loan inparticular has no early-repayment "fines" so to speak. I could have, if money allowed, paid the loan back in 3 years instead of the 5 years listed yet the interest rate was fair high on this one, around 16%.
 
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