What’s the difference?
At first glance, Vehicle Loans and Personal Loans seem similar. Both have fixed interest rates, flexible terms from 18 months to 7 years, and no ongoing fees. However, some key differences could make one option better for you.
How the funds are distributed
This is one of the most practical differences between the two products.
With a NOW Finance Personal Loan, once approved, the funds are deposited directly into your bank account, and you begin repaying the loan straightaway. Once you’ve found the vehicle you want to buy, you then pay the seller directly – whether that’s a dealership, a private seller, or anyone else. It’s flexible, and it gives you full control. Both Secured and Unsecured Personal Loans are available, but we’ll focus on the Unsecured Personal Loan in this article.
With a NOW Finance Vehicle Loan, the funds go directly to the seller, and you only start making repayments on the loan once you’ve bought the vehicle. Before settlement, we’ll also need to verify the vehicle using the VIN (Vehicle Identification Number) before we release the funds.
Fees and interest rates
Our Personal Loans come with no fees at all – no establishment fee, no monthly fee, no early repayment fee, meaning the comparison rate is always the same as the interest rate.
Our Vehicle Loan has a one-off establishment fee of up to $595, which is rolled into your loan repayments. After that, there are no ongoing fees.
Because the Vehicle Loan operates within a tighter rate band, the interest rates on offer are more narrowly focused. That tighter range reflects the nature of the product and the vehicle as an asset in the transaction. If your credit score isn’t in the excellent range, you’ll often get a lower rate with the Vehicle Loan.
The Personal Loan has a wider rate range because it covers a broader range of borrowers and purposes. If you have excellent credit, you could get a cheaper rate with a Personal Loan, however if your credit is more average it’s likely a Vehicle Loan will offer a cheaper rate.
How much you can borrow
With a NOW Finance Unsecured Personal Loan, you can borrow between $5,000 and $50,000. You may be eligible to use an asset you already own as security for your personal loan to get a lower rate. If you choose a Secured Personal Loan, you could borrow up to $100,000 using an approved asset such as a vehicle as collateral.
With a NOW Finance Vehicle Loan, you could borrow between $3,000 and $150,000, depending on your credit profile, borrowing capacity, and the type of vehicle you are purchasing.
Not sure how much you need to borrow? With a Vehicle Loan, you can get pre-approved before you start shopping. Pre-approval lets you know exactly how much you can borrow, so you can negotiate with confidence – whether you’re at a dealership, on Carsales, or meeting a private seller.
Which product suits you best?
Choose a Vehicle Loan if:
- You’re comfortable with the funds going directly to the seller.
- You want the option to get pre-approval so you know how much you can borrow.
- A tighter interest rate band with a single establishment fee works for your budget.
Choose a Personal Loan if:
- You want the funds deposited into your account and prefer to manage the purchase yourself.
- You’re looking to cover multiple purposes in one loan, for example, buying a car and covering registration or insurance costs.
- You have an exceptional credit score. The starting rate for a personal loan is 5.95% p.a. For borrowers with strong credit, this could make it a more cost-effective option.
- You want absolutely no fees attached to your loan.
Loan amounts at a glance
| Personal Loan | Vehicle Loan | |
| Loan amount | $5,000–$50,000 unsecured; $15,000–$100,000 secured | $3,000–$150,000 |
| Term | 18 months–7 years | 18 months–7 years |
| Interest rates | 5.95%–26.95% p.a. | 7.59%–15.39% p.a. |
| Comparison rates | 5.95%–26.95% p.a. | 8.43%–16.29% p.a. |
| Fees | No fees ever | One-off establishment fee up to $595 |
| Funds paid to | Your bank account | Directly to the seller |
| VIN verification | Not required for unsecured loans | Required |
Ready to find your rate?
Check your personalised rate in just two minutes, without affecting your credit score. You may also be eligible to compare options like an unsecured personal loan and a vehicle loan side by side. Once you apply, this may temporarily impact your credit score, which is why we recommend checking your rate first before deciding to commit. You can also try our repayment calculator to estimate your repayments or check your eligibility using our eligibility calculator.
