Personal Loan for Car? Here's How to Drive Away Fast

You're in the market for a new car but don’t have the funds upfront. You've heard about personal loans as a potential solution and wonder if they could be the key to getting you behind the wheel. With a myriad of options available, navigating through them to find the best fit for your needs can be challenging. Fortunately, personal loans can be a viable and flexible option for purchasing a car. Here's everything you need to know about securing a personal loan for your dream vehicle in 2026.

Understanding Personal Loans for Cars

Personal loans are unsecured loans that you can use for a variety of purposes, including buying a car. Unlike car loans, which are secured against the vehicle, personal loans don’t require collateral, giving you more flexibility and ownership over your purchase. This means you can buy from private sellers or dealers without restrictions. However, because they are unsecured, interest rates may be higher compared to secured car loans.

Current Market Rates and Requirements

As of 2026, interest rates for personal loans in Australia typically range from 6.49% to 12% depending on your credit score and the lender. With over 83 lenders on the Esteb and Co panel, you have a broad spectrum of options to compare and choose from.

To qualify for a personal loan, lenders typically require:

• A minimum credit score of 620
• Proof of income (such as payslips or tax returns)
• A stable employment history
• Australian residency or citizenship

Steps to Secure a Personal Loan for a Car

Securing a personal loan involves several steps. Here’s a step-by-step guide to help you navigate the process:

1. Assess Your Budget: Determine how much you can afford to borrow and repay each month, considering your current financial commitments.
2. Check Your Credit Score: Obtain a free credit report to ensure your score is accurate and identify any areas for improvement.
3. Research Lenders: Use the Esteb and Co platform to compare offers from over 83 lenders, focusing on interest rates and loan terms.
4. Gather Documentation: Prepare your financial documents, including proof of income, identification, and credit history.
5. Apply for Pre-Approval: Submit your application to get a clear idea of the loan amount and terms you qualify for before shopping for a car.
6. Choose Your Car: Once pre-approved, select the vehicle that fits your budget and preferences.
7. Finalise the Loan: Complete the loan application process with your chosen lender, provide any additional documentation, and sign the contract.

Tips and Considerations

When considering a personal loan for a car purchase, keep these expert tips in mind:

• Compare Multiple Offers: Don’t settle for the first offer. Comparing loans can save you thousands over the life of the loan.
• Beware of Fees: Look out for origination fees, early repayment fees, and other hidden charges that could increase the cost of your loan.
• Consider Loan Terms: While longer terms reduce monthly payments, they increase the total interest paid. Find a balance that suits your financial situation.
• Improve Your Credit Score: A higher credit score can qualify you for lower interest rates, potentially saving you money.
• Utilise Lender Panels: Leverage Esteb and Co’s access to 83+ lenders to find the best deal tailored to your needs.

Frequently Asked Questions

• Can I get a personal loan for a used car?
  Yes, personal loans can be used for both new and used cars, offering flexibility in your purchase.
• How long does it take to get approved for a personal loan?
  Approval times vary, but many lenders offer quick decisions, sometimes within 24-48 hours.
• Is a personal loan better than a car loan?
  This depends on your needs. Personal loans offer more flexibility, while car loans often have lower interest rates.
• Can I pay off my personal loan early?
  Most lenders allow early repayments, but check for any penalties or fees that might apply.
• What happens if I default on my personal loan?
  Defaulting can severely impact your credit score and lead to legal action. Always ensure you can meet repayment obligations.