Unsecured Car Loans

Access unsecured financing with a car loan through Savvy.

No obligation. It won't affect your credit score.
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, updated on July 4th, 2023       

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Unsecured Car Loans

Looking for unsecured car financing? An unsecured car loan is a type of consumer car loan where your car is not used as collateral or a security for the loan. Instead, a lender will determine eligibility using a borrower’s credit score or overall creditworthiness. In exchange for taking on more risk, your bank or lender will usually charge a higher interest rate in comparison with a secured car loan. Unsecured loans may also come with a fixed or variable interest rate.

With unsecured car loans available with competitive interest rates from a wide range of lenders, Savvy can help you buy the car that you’re looking for, no matter the age, make or model. Access the best unsecured financing without having to break the bank with us.

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Unsecured car loan features and eligibility

Access competitive rates

Save money by comparing interest rates tailored to your profile from our lenders.

Borrow up to $50,000

You can select the amount you want to borrow, from $5,000 all the way up to $50,000, affording a wide range of car purchases.

Choose your term length

As part of your unsecured financing, you’re able to choose between loan durations of one and seven years to shape your repayments.

Set your own repayment schedule

Additionally, many lenders offer flexible repayment schedules of either monthly, fortnightly or weekly loan pay instalments.


No age restrictions

You can choose to buy cars of whatever type and age that you wish, unlike secured loans.

Additional features

You can also look to access added features on your loan, such as free extra repayments and redraw facilities, which add flexibility.

Car requirements

Your car must never have been written off previously, be covered by a comprehensive insurance policy and be made locally or imported by its manufacturer.


You must be at least 18, hold citizenship, permanent residency or an applicable visa and earn at least $26,000 p.a.

Trust Savvy with your unsecured car loan

How to apply for unsecured financing with Savvy

Unsecured car loans explained further

Who can access unsecured car loans?

As these are a type of loan that doesn’t put up your purchased asset as collateral, lenders will look at a borrower’s creditworthiness, or ability to pay back a loan, instead.

Lenders may approve financing even for bad credit customers, but their interest rates will be significantly higher than those customers with good or excellent credit. At Savvy, we partner with flexible lenders who are able to approve loans for borrowers of all types, so you can submit a quick quote with us and we can help you secure financing for your car.

How can you tell if you have good credit?

In Australia, credit reporting agencies give customers a credit score based on creditworthiness. These range from 0 to 1200, with others using a 0 to 1000 scale.

Lenders reward lower risk borrowers with more competitive interest rates or access to specialised lending products. Higher risk borrowers may gain approval with a higher than usual interest rate.

Why should I consider a personal loan for my car?

If you have good or excellent credit, a personal loan may be an appealing alternative to a secured car loan as you won’t need to put up your car as security. In a secured car loan, your car is collateral in case you do not pay back the loan, known as a default. In this situation, a lender has the right to repossess the car if you default. In an unsecured loan, though, you are at very little risk of losing the vehicle to repossession.

The lack of security requirement for unsecured personal loans also means that you won’t face any restrictions on the age of the car you can buy. Secured car loans typically employ this, as the car has to retain some value if it’s to be repossessed and sold. Also, because the car has to serve as security throughout the loan, financiers are more reluctant to approve an older car as its likelihood of malfunction is increased compared to a brand-new or near-new vehicle. Because there aren’t any age obligations for unsecured finance, you have a greater range of cars to choose from.

They’re also more flexible than comparable secured car loans. Since loans are unsecured, you may be eligible to borrow more than the car’s value to pay for registration or insurance, or to consolidate other debts. Some products may also include redraw facilities. This allows you to withdraw any additional payments you’ve made from the loan, using it in a similar manner to a line of credit.

Your unsecured car finance questions answered

Can I get unsecured financing for a used car?

Yes, but with caveats. A lender wants to take on as little risk as possible when offering unsecured car loans and may charge a higher interest rate when financing a used car using an unsecured car loan under most circumstances, due to the higher risk involved.

What is the difference between fixed and variable interest rates?

Unlike secured car loans, which have a fixed interest rate, unsecured car loans give borrowers an option for a fixed or a variable rate. A fixed rate means the interest rate is locked in for the term of the loan. A variable rate may go up or down depending on the market.

The biggest factor in setting a market rate for interest is the Reserve Bank of Australia. If the “official cash rate” goes up, so do your repayments. This can prove troublesome for budgeting. However, if the cash rate goes down, your repayments are cheaper. Talk to a financial professional before considering a variable rate car loan. Variable interest rate loans also have fewer penalties for paying the car loan off early compared with similar fixed rate loans.

I have bad credit. Will I be approved for an unsecured car loan?

Yes, but if you are approved, you will have to pay a significantly higher interest rate due to the added risk a lender will incur.

What is a variable interest rate?

A variable interest rate is a rate that is determined by the loan market. The biggest influence on a variable rate is the Reserve Bank cash rate. Your repayments may go up or down if the official cash rate rises or falls.

What is a secured car loan?

secured car loan is a loan that ties the amount of the loan to the value of the car. The car is used as collateral and may be repossessed if a borrower defaults on the loan. The upside is that interest rates are generally lower than unsecured car loans.

What is a comparison rate?

A comparison rate is an interest rate that includes most fees and charges expressed as a percentage per annum. You can compare similar loans using a comparison rate table. Comparison rates make it easier for consumers to contrast similar loan products as a like-to-like for features, amounts, and loan terms.

How do I check my credit score?

You can check your credit score for free at any credit reporting bureau once per year. These can also give you detailed credit histories such as inquiries, defaults, and applications.

What does it mean when it says 0% finance?

0% finance or “zero finance” are offered by dealers as part of a sale or runout deal on earlier model cars. Zero percent finance may mean no “interest” on the loan itself but borrowing costs are recouped as fees. These types of car loans may restrict you from negotiating a lower price, or may include large balloon payments to entice customers.

Can I still get a competitive interest rate on my loan?

Yes – however, rates in general are higher on unsecured personal loans than secured car loans.

This is because there is a greater perceived risk by the lender, specifically that there isn’t an asset to add a layer of security to the loan. This doesn’t mean you can’t get a good interest rate, though.

The better your credit score, the better the interest, while evidence of successful past borrowing of a similar nature will instil greater confidence in your lender.

What is the average size of a car loan?

The Royal Commission saw that the average car loan size in 2017 was $39,445 and the median loan size was $31,003. The most popular (mode) loan size was $20,000. Men also borrowed $5,000 more on average compared with women.

Finance commitments (loans) for new cars and motor vehicles were equivalent to 2% of Gross Domestic Product, which is 2% of all the goods and services produced and consumed in Australia.

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