We get it, loans can be confusing, but they don’t have to be. Let’s break down some frequently asked questions for you.
Q: What is a secured loan?
A secured loan is when the lender has security over the assets – in this case, this is your new car. This means if for any circumstances, the borrower fails to repay the loan, the lender can sell the secured asset to recoup the losses. Security makes a loan less risky for the lender and it also reduces the interest rate for the borrower as well as keeping the repayments the same over the term of the loan.
Q: How is interest calculated?
Interest is calculated on the total amount borrowed over the loan term and then this total amount is divided by the number of loan repayments over the full loan term. Since this is a fixed interest rate car loan, the interest and repayment amounts stay the same throughout the duration of the loan. Having this certainty makes budgeting easier and more manageable.
Q: Will I be charged for making extra payments?
You are welcome to make additional repayments to your loan at any time. If, however, you pay off your car loan early – an early Termination Fee may apply. For more information, please visit the rates and fees section on our website.
Q: How can I avoid paying late fees?
We understand that nobody likes a late fee! Paying by direct debit saves you time and the hassle of manual repayments, it also helps you to avoid fees from missed or late payments.
Make sure you have sufficient funds in your bank account so all direct debits and other scheduled payments can be made. You can also make additional repayments, so you pay off your loan sooner and save on interest. (Early termination fee applies).
If something changes and you’re finding it hard to manage your repayments, don’t worry – our Hardship Care team are here to help. We may be able to tailor an arrangement to suit your needs. To learn more, visit our Hardship Care page.
Q: What is a balloon payment?
A balloon payment allows you to reduce your repayments during the term of your car loan by making a once-off lump sum payment at the end of your loan. For instance, if you were to take a $30,000 loan over five years with a 30% balloon, your regular repayments at a comparison rate of 7.24% would drop from $597.69 per month to $475.33 per month with the addition of a $9,000 lump sum payment due with your final payment.
Balloon payments are available for cars that are up to five years of age. We will get in touch with you within the last six months of your loan term to discuss your payment options. These could include re-financing the balloon amount into a new car loan (credit and approval criteria will apply) or trading the car in to upgrade. Otherwise, you could pay this balloon payment from your own funds.
Q: What other types of car loans does Latitude offer?
Here at Latitude we also offer loans for both new and used cars, light commercial vehicles (up to 4.5 tonnes), motorbikes, jet-skies (PWcs), boat, caravans, campervans, motorhomes and horse floats.
Q: Where can I calculate my expected repayments?
You can check what your monthly repayments would be on a Latitude Car Loan through our repayments calculator here.
