Borrowing $10,000 - how to score a top car loan
Whether it’s your first set of wheels or your next vehicle in a long line of cars you’ve owned before, if you need to borrow $10,000, you want to make sure that the car loan you get has a great interest rate and features that will help you to save. Read on as we go through the FAQs you need know about.
Types of car loans
There are a bunch of car loans available to a variety of different borrowers, whether it’s for a brand new or used car.
When borrowing $10,000 for a car, you might have the option to choose between an unsecured or a secured loan. With a secured loan, you’ll be using your car as collateral. The upside to this is that lenders usually offer lower interest rates on secured loans.
In addition to this, you’ll have the option to choose between a fixed rate car loan or a variable rate loan. If you have never borrowed money for a car before, on a fixed rate loan, your interest rate and repayments stay the same for the loan period. On a variable rate loan, the interest rates can go up or down, depending on the lender or market.
Depending on the cost of your vehicle (and how much money you already have saved) will determine how much you need to borrow. For example, a $10,000 car loan may be more suitable for someone looking to buy a used car as opposed to a $50,000 car loan which is better suited for something new.
Keep in mind, the big banks aren’t the only places to look when considering taking out a car loan, you can also borrow from other smaller lenders or even online peer-to-peer platforms. Check out our table above for all the providers we compare.
Which features do the best car loans have?
When considering which car loan is best for you, there are a handful of features you should be mindful of like flexible repayment options, low interest or minimal fees.
For example, if you are a borrower who wants to pay your car loan off quickly and minimise the amount you pay in interest over the life of your loan, the option to make extra repayments without penalty could be a good feature to consider. Similarly, if you need even more flexibility, a redraw facility could be an important option if you want to make extra repayments so that you can access your extra funds later on if you need.
How fast can I get a $10,000 car loan?
While some lenders may approve you on the same day you apply online for a car loan, others may take a few business days.
Generally, the process follows these steps:
- - Complete application: Take the time to fill in an application online, in branch or over the phone and ensure you have all the documentation you need so that you are approved as quickly as you can be.
- - Receive your lender's reply: This usually a conditional approval message which may include a request for more information if a lender is dissatisfied with what you’ve provided. This reply could be instant or a few days after you completed your application.
- - Get your lender's unconditional approval: Unconditional approval can take up to a few business days but varies between lenders. Essentially what it means is, you are approved to receive the funds for your car without any further conditions.
- - Receive your funds: Depending on what lender you choose will determine how long it takes for the funds for you car loan to arrive in your account. Check with your lender how long this process usually takes, because it could be a number of days after approval.
- - Start making repayments: Once your loan has been funded you’ll then be responsible for making repayments per your loan agreement. It’s a good idea to set up an automatic deduction from your account so that you don’t miss any repayments.
Also keep in mind, there are a few things that could delay your car loan approval. These include not submitting the right documentation, not providing the correct information about your car or applying after the instant response cut-off time.
What is the best loan term for a $10,000 car loan?
There’s no simple answer as there is no one term for a $10,000 car loan that’ll suit every borrower. Like other personal loans, when taking out a car loan it’s all about assessing what will work best for your situation by considering the cost of the vehicle you want to buy and weighing it up with your financial situation now and how likely you are to make your repayments in the future.
Generally, car loans range from 1 to 7 years. The longer your loan, the more you pay in interest long term, but the smaller your repayments will be month to month. While a 1 year car loan may seem like the easiest way to avoid paying more in interest, if paying back $10,000 in one year is going to really stretch your budget it is better to go for a longer loan term initially and make extra repayments. Check out our budget calculator to see where you sit financially.
More frequently asked questions
Can I get $10,000 car loan with bad credit?
Even if you have a low credit score, you may still be able to get a $10,000 car loan. Just keep in mind though, you may end up facing a higher interest rate than someone with a healthier credit profile as some lenders have tiered interest rates. Approval criteria varies between lenders so make sure you read the fine print before you apply.
Do all lenders offer $10,000 car loans?
There are some car loans where the minimum loan amount will be above $10,000 but the vast majority of lenders in our database will have a car loan for $10,000 or even less. Many lenders start their borrowing limits with a $5,00 car loan and go up as high as $50,000, or even $100,000 in some cases.
When choosing a lender, don’t limit yourself to big bank brands, there are a number of very competitive online lenders that have great rates and low fee car loans that are suitable for small loans.
How fast will I get approved for my loan?
These days with online lenders and online applications, getting a car loan approved and funded can be fast, even next day fast. Some of the bigger banks or more traditional banks might have longer application and approval processes so it could take longer if you choose to go with them for your car loan. It is usually a good idea to have your funds lined up well in advance of shopping around for a car. That way you’ll be able to know exactly how much you’ll be able to afford or offer before falling in love with a particular car make/model.
Is applying for a car loan easy?
Yes, you’ll need to fill out an application form and make sure that you have all the ID, proof of income and details about your assets and liabilities before you apply.
It is also a good idea before making any application for credit that you do a check of your credit score to make sure that there are not any errors in it that could affect your chances of getting approved and that $10,000 in your account.
What other car expenses should I budget for?
When you are buying a car, it’s not just the cost of the car you need to factor in. There is the cost of stamp duty, rego, car insurance, petrol and maintenance to consider as well. You can read our in depth guide on the costs of buying a car to make sure that you’ve got all the expenses covered.