What is a typical car loan interest rate in Australia in 2026?

In 2026, secured car loan rates in Australia typically range from 5% to 9% for borrowers with good credit, while unsecured car loans sit between 7% and 18%. The rate you receive depends on your credit score, income, whether the loan is secured against the vehicle, and the age of the car. New cars generally attract lower rates than used cars.

What is a balloon payment on a car loan?

A balloon payment (also called a residual value) is a lump sum due at the end of your car loan term. For example, a 30% balloon on a $30,000 loan means you pay lower regular repayments during the term, but owe $9,000 as a final payment. You can pay this in cash, refinance it into a new loan, trade the car in, or sell the vehicle. Balloon payments are common on novated leases and chattel mortgages.

What is the difference between a secured and unsecured car loan?

A secured car loan uses the vehicle itself as collateral — if you default, the lender can repossess the car. Because the lender's risk is lower, secured loans typically have interest rates 2% to 5% lower than unsecured loans. An unsecured car loan (or personal loan used for a car) does not require collateral, giving you more flexibility but at a higher cost. Secured loans may also restrict you from selling the car until the loan is fully repaid.

Should I get a car loan or pay cash?

Paying cash avoids interest entirely and is cheaper in the long run. However, a car loan lets you keep your savings available for emergencies or investments that may earn a higher return than the loan's interest rate. Consider the opportunity cost: if your savings earn 5% but the car loan costs 7%, paying cash saves money. If you have a high-return investment or need liquidity, financing may make sense. Always factor in the total interest cost — a $30,000 loan at 7% over 5 years costs roughly $5,600 in interest.

Can I pay off a car loan early in Australia?

Yes, most car loans in Australia allow early repayment. Fixed-rate car loans may charge an early termination fee or break cost, while variable-rate loans generally have no penalty. Making extra repayments or paying fortnightly instead of monthly can save significant interest over the life of the loan. Always check your loan contract for any early repayment fees before making additional payments.

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Enter your loan amount, interest rate, term, and optional trade-in or balloon payment to calculate your car loan repayments. Compare monthly, fortnightly, and weekly schedules and see how different interest rates affect your total cost.

Last verified: 5 May 2026

What are the repayments on a $30,000 car loan?

Australian secured car loan rates are typically 5-9% for new cars with good credit and 7-12% for used cars. Unsecured personal loans used for cars run 7-18%. A $30,000 loan at 7% over 5 years costs about $594/month (~$5,614 total interest). Shortening to 3 years raises the repayment to ~$926/month but cuts interest to ~$3,338. Fortnightly repayments (half monthly, 26 times/year) save a small amount over the life of the loan. Source: ASIC MoneySmart; RBA Retail Deposit and Lending rates.

Worked example. $40,000 car, $5,000 trade-in, $35,000 financed at 8% over 5 years: repayment ~$710/month total interest ~$7,570. Add a 30% balloon ($12,000 due at end of term): regular repayments drop to ~$563/month but you still owe the $12,000 balloon, so total interest over the whole loan rises to ~$9,780 — the balloon trades lower repayments for higher total cost.

Loan amount*

The purchase price or total amount you need to borrow for the vehicle ($1,000 to $200,000).

Interest rate*

The annual interest rate on your car loan. Secured car loan rates in Australia typically range from 5% to 12%.

Loan term*

years

The length of your car loan in years. Most car loans are between 1 and 7 years.

Repayment frequency

Monthly

12 repayments per year

Fortnightly

26 repayments per year

Weekly

52 repayments per year

Trade-in value

The value of your current vehicle if you are trading it in. This reduces the amount you need to finance.

Balloon payment

A balloon (residual) payment is a lump sum due at the end of the loan, expressed as a percentage of the total financed amount. It lowers regular repayments but must be paid or refinanced at maturity.

Upfront fees

Any establishment, application, or documentation fees charged by the lender that are added to the loan balance.

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.

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What are the repayments on a $30,000 car loan?

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