So what exactly is vehicle lending without security? It is personal finance to purchase a motor vehicle without the vehicle being offered as security or collateral against the funding. The vehicle is not required as security, neither are other assets which are owned by the applicant.
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Without security or the assets of the applicant provided as collateral, lending is approved based on the creditworthiness of the applicant. Lenders assess credit histories and scores. A high credit score is required to get approved and receive the best interest rate offers.
Due to the lack of collateral, interest rates are typically higher than for secured lending products. Terms, lending limits and special conditions may be applied, subject to lender guidelines. As approval is based on ability to pay and creditworthiness, lenders may set an upper limit for how much they will approve to individual applicants.
Without the vehicle provided as security, if the borrower defaults on the commitment – fails to meet the repayment schedule, the lender is not in a position to repossess the vehicle. They will report any defaults to credit agencies and can take action through the legal system to recoup the monies owed on the debt.
If you have a great credit score but are asset-poor or do not want to use the vehicle as security, this may be an option for you. Request a quote to see how affordable collateral-free vehicle financing may be for you.
Collateral-free vehicle financing can provide benefits to suit many buyer scenarios. It can provide affordable credit to purchase second-hand and used cars that are not deemed as suitable security by lenders. Credit can be approved for buyers to purchase classic vehicles and restoration projects.
Financing without asset security may provide opportunities for asset-poor, high-credit score buyers to achieve affordable funding. Get financing for part of the purchase price of the vehicle where a sizeable trade-in or deposit is made. If only borrowing a percentage of the vehicle’s value, a buyer may not want the entire vehicle available as collateral. A collateral-free product may provide the ideal solution.
While rates are higher than for secured products, using our expert broker services, buyers can achieve the best rates from across 80+ lenders. Sourced and negotiated individually for their specific circumstances. Flexibility with fixed or variable rates and with additional payments on variable rate loans not attracting break fees.
While market rates are typically higher rates for unsecured than for secured products, as with all motor vehicle lending products, there are variations in rates across lenders. With 80+ lenders in our lender panel, we source the best rates currently available in the market.
As specialists in all areas of motor vehicle lending, we know which lenders will offer the best rates on collateral-free products and can match our customers with the right lender, ensuring the lowest rates and a hassle-free lending process.
We make the process of applying for no-collateral vehicle financing quick and easy. Buyers can call and apply over the phone or use our quick and convenient online application form. To be eligible, applicants for personal financing must be over 18 years of age and provide information regarding employment, income and other financials, as required by the Consumer Credit Act.
Unsecured lending products are approved based on creditworthiness. That means a high credit score and solid credit history of meeting credit payments and bills is necessary. Apply online for fast, no-obligation approval.
Secured and non-secured products differ not only with the collateral but in other features. Secured lending typically uses the vehicle as the collateral, often the only collateral. Loan amounts approved can vary. With the assurance of a secured product, lenders may be more inclined to approve large credit amounts on secured loans. No deposit or 100% of the value of the vehicle.
Having the vehicle as security is the lender’s assurance that the debt can be recouped if the borrower defaults on the credit. Without that security, lenders are more exposed. This can result in higher interest rates on non-secured financing and different terms and conditions to compensate for the lack of collateral.
Fixed interest rates typically apply to secured vehicle credit. Vehicle finance without security, maybe with a fixed or a variable rate. Variable rates will change in line with market and lender rate fluctuations, resulting in changes in repayments over the term.
While the credit is not secured against the acquired vehicle, lenders may request some borrowers to provide other collateral.
Need more information on secured v no-collateral lending? Call to speak with one of our experts.
There are a range of scenarios where credit without security to purchase a motor vehicle may be advantageous for buyers. Scenarios can vary, so speak with us about yours and our experts can present you with the best options. Contact us now to clarify your options.
Not sure if a collateral-free or secured product is your best option? Wondering what your repayments may be on a personal loan with no security? Use our financing calculator to obtain rough estimates.
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* The comparison rate displayed is calculated for a loan of $30,000 over 5 years. The results from this calculator should be used as an indication only. Quoted repayments are based on advertised rates and do not include lender fees and charges. Results do not represent either quotes or pre-qualifications for a loan. The specific details of your loan will be provided to you in your loan contract. It is advised that you speak with us so that we can provide you with advice that is tailored to your situation.
DISCLAIMER: This comparison chart is provided for general reference purposes only. It is not in any way intended as a loan application, it is not a quote for business finance or any indication that an application has been received or approved. The rates quoted are for business use where the funds are predominately for business use and may not include all the fees and charges that may be applicable. The interest rates and the repayments displayed do not account for any conditions pertaining to your individual loan application. Therefore the interest rate and repayment you may be offered may vary from the amount shown.
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Interest rates on collateral-free lending vary across the motor vehicle lending market. Buyers can engage the services of a specialist motor vehicle lending broker to source the best interest rate and offer from across many lenders.
Approval for vehicle finance can be granted without the borrower offering the vehicle or other assets as security for the funding. Approval is given based on the creditworthiness – the credit rating, score history and ability to meet the lending commitments.
Financing without collateral is approved based on a high credit score, good credit history and solid income to repay the debt. Approval criteria can vary across the lender market.
Financing a vehicle without collateral means that the vehicle or other assets are not offered as security against the credit borrowed. The lender cannot repossess the vehicle if the borrower defaults on the credit but can sue to recoup funds.
Secured funding typically uses the vehicle being bought as the collateral for the financing. Lending without security does not use the vehicle or any other assets owned by the borrower. Without security, applications are approved based primarily on the creditworthiness of the applicant and ability to repay the debt.
