Car loan or personal loan — which one's right for you?

At a glance

• Both sit in the same range at Instant Finance: 9.95% to 29.95% p.a., $500 to $50,000, 3 months to 7 years

• Security can genuinely lower your rate with us, and may help with larger amounts

• Our car loans are built around buying a vehicle; our personal loans work for that and more

• Buying from a dealer, buying privately, or just need finance generally — we can help either way

• You deal with us directly — we're the ones making the call, not a broker matching you elsewhere

• Your actual rate depends on your situation — the only way to know it is to apply

 

Is a car loan cheaper than a personal loan?

Generally, yes — offering security (usually the car itself) lowers the lender's risk, and that often means a better rate.

It's no different at Instant Finance: security can genuinely bring your rate down, and for larger amounts, it can be what makes the loan possible in the first place.

So, if you can offer the car as security, it's likely to work in your favour on rate; if you'd rather not tie the loan to it, or you're still deciding, a personal loan keeps things flexible.

Since your rate's set individually rather than off a fixed list, the best way to know your real number is to apply.

Car loan vs personal loan, side by side

Both products sit in the same published range — the real differences are what the loan's built for, and whether security's part of the picture.

A quick note on comparing rates: the headline percentage only tells part of the story — what matters is the total you'll repay once term and fees are factored in.

A couple of percentage points can add up to real money over a few years, which is why we lay out the full repayment breakdown rather than just the rate. See what different rates actually cost.

Four situations where the choice gets easier

Buying from a dealer

Either works, but our Car Loan page is built around exactly this — car-specific tips, a car finance calculator, and a process dealers are used to seeing.

Buying privately

Same story — a car loan handles private sales just as well as dealer purchases. Worth doing a PPSR check before you commit either way — it's a quick, official way to confirm the car doesn't already have money owing on it from a previous owner.

More on buying privately.

Need funds beyond just the purchase price

If you're covering more than the car itself — registration, insurance, a warranty, accessories — a personal loan can bundle that in without needing everything tied specifically to the vehicle.

Already have a loan and want more room to move

If your situation's improved since you took out an existing loan — whatever it was for — it's worth talking to us. If the affordability's there, we may be able to help with new lending, including refinancing what you've already got. We'll always work through your full picture with you first.

FAQ's

Is a car loan cheaper than a personal loan?

Generally, yes — security tends to bring the rate down, since it lowers the lender's risk. At Instant Finance, that holds too: security can move your individual rate and can help with larger amounts. Your exact number depends on your situation, so applying is the only way to know it for sure.

What's the difference between a car loan and a personal loan?

At Instant Finance, both sit in the same 9.95% to 29.95% p.a. range, with the same loan amounts and terms. The real differences are what the money's for and whether you offer security: a car loan is built around financing the vehicle you're buying, while a personal loan can cover that and more. Offering the car as security is available either way, and it's what can move your individual rate.

Can I use a personal loan to buy a car?

Yes. A car loan is really just a personal loan, framed specifically around buying a vehicle. Take a personal loan instead and you can still put it entirely toward a car — the difference isn't what you're allowed to buy, it's whether you want the loan secured against the vehicle, and whether you might want some of the funds for other costs too.

What happens if I sell a car with a secured loan?

If your loan's secured against the car, you'll need to sort that with us before selling — usually by paying off what's owed, since the security has to be cleared before ownership can transfer.

You may also be able to provide different security to the same value

If it's unsecured, you're free to sell, though you'll still need to keep up repayments as normal. Full walkthrough here: selling a financed car.

Which is faster to get approved?

No difference at Instant Finance — the approval process is the same either way, and most applications get a same-day response regardless of which one you apply for.

And because we're the ones assessing your application, not a broker passing you along to someone else, there's no extra step in between — you're talking to the people actually making the decision.

Whichever way you lean, we're here to help

There's no wrong choice here — it comes down to your situation.

Set on financing a specific vehicle? Start with our car loan. Want more flexibility for a mix of costs? Our personal loan covers that too.

Not sure yet? Apply either way and we'll talk it through with you before anything's locked in.