A Consumer Loan is a convenient and flexible way for an individual to obtain finance to purchase a New or Used vehicle of their choice.
The vehicle is used as security for the loan, however the borrower has ownership from the beginning of the contract. Upon the final payment the borrower gets clear title to the vehicle.
The borrower can make a deposit towards the vehicle purchase to reduce their monthly repayments, however, dependent on the credit profile of the borrower, no deposit may be required at all. A Borrower may also be able finance other costs associated with the vehicle purchase such as Comprehensive Insurance, registration, and on-road costs.
Typical terms of the Consumer Loan range from 12 to 84 months and interest rates are usually fixed. Most institutions provide Borrower's with convenient payment methods like direct debit and Bpay and payments can be made as frequently as the Borrower likes with limited penalties for early termination.
A Consumer Loan can also be used to finance motorcycles or boats.
Borrowers have peace of mind knowing that their loan is regulated by the Consumer Credit Code.
Benefits of a Consumer Loan
- Preserves the Borrower's cash and credit facilities. Funds can be used to purchase other assets, invested in income producing assets, or maintained to assist with unexpected expenses.
- Other costs associated with the loan can be financed on the contract such as Comprehensive Insurance, registration and on-road costs.
- Ownership of the vehicle by the borrower
- Payments can be structured to suit the borrower’s budget and cash flow by varying the deposit, term, interest rate and any lump sum payment
- With a fixed interest rate the borrower is protected against the market fluctuations
- Borrower’s can increase the frequency of their payments to reduce the interest charges and the term of the loan
- Borrower’s can choose various payment methods including direct debit, BPAY
- There is no GST on loan payments including any final balloon payment. However, GST may be payable on the purchase price of the vehicle or the other items like insurance.