Quick quiz
Car loan or personal loan?
Four questions, one plain-English suggestion, and the trade-offs explained. Nothing you click is sent anywhere.
How to think about the choice
The real question isn't the name of the product. It's whether the car is used as security. A secured car loan registers the lender's interest against the car on the Personal Property Securities Register until the loan is repaid. That usually brings the cost down, but it also means the lender can repossess the car if you stop paying.
An unsecured personal loan leaves the car free and clear. You can sell it, modify it or trade it in without the lender's say-so. In exchange, you'll usually pay more and may be able to borrow less. For an older car or a project car, an unsecured loan is often the practical option because secured lenders may set limits on vehicle age.
Whichever way you lean, run your numbers through the car budget planner first, then read secured vs unsecured personal loans for the detail. When you're ready, the apply page lets you see your options before you commit.
Frequently asked questions
What's the main difference between a car loan and a personal loan?
A car loan is usually secured by the car you're buying, so the lender can repossess it if you default. A personal loan can be secured or unsecured; an unsecured one doesn't put the car at risk.
Which is cheaper?
Secured loans usually cost less than unsecured loans because the lender has the car as security. Moneysmart notes unsecured loans usually have higher rates and lower borrowing limits. Always compare the total amount payable, including fees.
Can I use a personal loan to buy a car?
Yes. An unsecured personal loan can be used to buy a car, and is common for older cars that don't meet a secured lender's age rules, or when you'd rather the car wasn't tied to the loan.
Does the quiz save my answers?
No. It runs in your browser and nothing is sent to us.
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