$20,000 Car Loans

If you’re on the hunt for a new car and your budget is $20,000, you can choose from a range of new and used vehicles. Luckily, you also have a few financing options available to you depending on your needs and financial situation.

This guide will take you through these options including how they work, and their benefits and drawbacks to help you decide what’s right for you.

What loan can you get for a $20,000 car?

The types of loans you can get for a $20,000 car include:

• A secured car loan. If you use your car as security for a loan you can benefit from a competitive interest rate. Keep in mind that you’ll only be able to borrow the value of the car, whether the car is new or used. Rates for secured car loans range from around 5% p.a. up to around 13% p.a.
• Unsecured personal loans. With this loan, you don’t have to put forward an asset as security and you can also apply for whatever amount you want. This can be an option if you need additional funds to cover registration and insurance. However, the rates for unsecured personal loans tend to be higher, generally between 8-16% p.a.
• Dealership finance. Dealership finance will get you a lower rate, which in turn will keep your repayments down. However, you are required to pay a balloon payment at the end of the loan, which can be thousands of dollars.
• A novated lease. With this loan option, you are able to rent the vehicle for a monthly lease fee without retaining ownership of the vehicle, which belongs to the financier. Once your loan term has finished, you can either continue your novated lease or pay out to the financier to get the car with your name on the title.

Compare loans suitable to buy a $20,000 car

• Secured Car Loans
• Unsecured Car Loans

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Name	Interest Rate (p.a.)	Comp. Rate (p.a.)	Application Fee	Monthly Fee	Monthly Repayment
OurMoneyMarket New Car Loan Fixed1 - 7 Years $2,001 - $75,000	Interest Rate (p.a.) 6.57% to 18.99%	Comp. Rate (p.a.) 7.19% to 21.78%	Application Fee $250 min.	Monthly Fee $0	Monthly Repayment $622.82	Go to siteMore Info Compare
loans.com.au - New - Variable Rate Special Variable3 - 7 Years $5,000 - $150,000	Interest Rate (p.a.) 6.24% to 7.74%	Comp. Rate (p.a.) 7.36% to 8.85%	Application Fee $400	Monthly Fee $8	Monthly Repayment $630.83	Go to siteMore Info Compare
Stratton Finance New Car Loan Fixed1 - 7 Years $10,000 - $300,000	Interest Rate (p.a.) 6.52% to 18%	Comp. Rate (p.a.) 6.95% to 23%	Application Fee $395	Monthly Fee $0	Monthly Repayment $625.27	Go to siteMore Info Compare	You'll receive a fixed rate from 6.52% p.a. depending on the lender you are approved with. Apply for up to $300,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.
Verified Lending Used Car Loan Fixed1 - 7 Years $10,000 - $200,000	Interest Rate (p.a.) 7.1% to 18.99%	Comp. Rate (p.a.) 8.06% to 22.99%	Application Fee $395	Monthly Fee $0	Monthly Repayment $630.67	More Info Compare
RACV New Car Loans Fixed1 - 7 Years $5,000 - $150,000	Interest Rate (p.a.) 7.29% to 16.99%	Comp. Rate (p.a.) 8% to 17.77%	Application Fee $499	Monthly Fee $0	Monthly Repayment $635.67	Go to siteMore Info Compare	You'll receive a fixed rate from 7.29% p.a. A larger loan of $5,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees.
NRMA New Car Loan Fixed1 - 7 Years $5,000 - $130,000	Interest Rate (p.a.) 7.29% to 16.99%	Comp. Rate (p.a.) 8% to 17.77%	Application Fee $499	Monthly Fee $0	Monthly Repayment $635.67	More Info Compare	Note: Take out a loan for an eligible electric vehicle and receive a 1.5% discount on your personalised interest rate (interest rates start from 5.79% p.a. and comparison rates from 6.49% p.a.)
OurMoneyMarket Used Car Loan - No Vehicle Age Limit Fixed1 - 7 Years $2,001 - $75,000	Interest Rate (p.a.) 6.57% to 18.99%	Comp. Rate (p.a.) 7.19% to 21.78%	Application Fee $250 min.	Monthly Fee $0	Monthly Repayment $622.82	Go to siteMore Info Compare
NRMA Used Car Loan Fixed1 - 7 Years $5,000 - $130,000	Interest Rate (p.a.) 8.49% to 16.99%	Comp. Rate (p.a.) 9.21% to 17.77%	Application Fee $499	Monthly Fee $0	Monthly Repayment $647.01	More Info Compare	You'll receive a fixed rate from 8.49% p.a. Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
Stratton Finance Used Car Loan Fixed1 - 7 Years $10,000 - $300,000	Interest Rate (p.a.) 6.52% to 18%	Comp. Rate (p.a.) 6.95% to 23%	Application Fee $395	Monthly Fee $0	Monthly Repayment $625.27	Go to siteMore Info Compare	You'll receive a fixed rate loan from 6.52% p.a. with a comparison rate of 6.95% p.a. A used car loan of up to $300,000 with quick approval times and balloon payment options.
loans.com.au - Variable Rate Used Car < 5 years Variable3 - 7 Years $5,000 - $150,000	Interest Rate (p.a.) 7.74% to 7.74%	Comp. Rate (p.a.) 8.85% to 8.99%	Application Fee $400	Monthly Fee $8	Monthly Repayment $644.82	Go to siteMore Info Compare
RACV Used Car Loans Fixed1 - 7 Years $5,000 - $150,000	Interest Rate (p.a.) 8.49% to 16.99%	Comp. Rate (p.a.) 9.21% to 17.77%	Application Fee $499	Monthly Fee $0	Monthly Repayment $647.01	Go to siteMore Info Compare	You'll receive a fixed rate from 8.49% p.a. Benefit from no ongoing fees, 5-hour approval and a 21-day satisfaction guarantee. Interest rate discounts for members.

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Name	Interest Rate (p.a.)	Comp. Rate (p.a.)	Application Fee	Monthly Fee	Monthly Repayment
NOW Finance No Fee Unsecured Personal Loan Finder award winnerFixed18 Months - 7 Years $5,000 - $50,000	Interest Rate (p.a.) 6.75% to 26.95%	Comp. Rate (p.a.) 6.75% to 26.95%	Application Fee $0	Monthly Fee $0	Monthly Repayment	Go to siteMore Info Compare
OurMoneyMarket Unsecured Low-Rate Personal Loan Finder award winnerFixed1 - 7 Years $2,001 - $75,000	Interest Rate (p.a.) 6.57% to 18.99%	Comp. Rate (p.a.) 7.19% to 21.78%	Application Fee 1.50% - 6% min. $250	Monthly Fee $0	Monthly Repayment	Go to siteMore Info Compare
Harmoney Unsecured Personal Loan Finder award winnerFixed3 - 7 Years $2,000 - $70,000	Interest Rate (p.a.) 5.76% to 24.03%	Comp. Rate (p.a.) 6.55% to 24.98%	Application Fee $275 - $575	Monthly Fee $0	Monthly Repayment	Go to siteMore Info Compare
ANZ Fixed Rate Personal Loan Fixed1 - 7 Years $5,000 - $50,000	Interest Rate (p.a.) 7.49% to 19.99%	Comp. Rate (p.a.) 8.18% to 20.58%	Application Fee $150	Monthly Fee $10	Monthly Repayment	More Info Compare	Special Offer: For a limited time, eligible borrowers of an ANZ Personal Loan can get a cashback of $500. This applies to both new loans and loan increases of $10k. Offer ends 15 August 2024. There is a limit of one cashback per loan per customer within an 18 months period. Cashback will be paid within 120 days of drawdown. Eligibility, ANZ’s credit assessment criteria, T&Cs, fees and charges apply.
NAB Personal Loan Unsecured Fixed Fixed1 - 7 Years $5,000 - $55,000	Interest Rate (p.a.) 8.49% to 20.49%	Comp. Rate (p.a.) 9.54% to 21.49%	Application Fee $250	Monthly Fee $10	Monthly Repayment	Go to siteMore Info Compare
NAB Personal Loan Unsecured Variable Rate Variable1 - 7 Years $5,000 - $55,000	Interest Rate (p.a.) 8.49% to 20.49%	Comp. Rate (p.a.) 9.54% to 21.49%	Application Fee $250	Monthly Fee $10	Monthly Repayment	Go to siteMore Info Compare
ANZ Variable Rate Personal Loan Variable1 - 7 Years $5,000 - $50,000	Interest Rate (p.a.) 7.49% to 19.99%	Comp. Rate (p.a.) 8.18% to 20.58%	Application Fee $150	Monthly Fee $10	Monthly Repayment	More Info Compare	Special Offer: For a limited time, eligible borrowers of an ANZ Personal Loan can get a cashback of $500. This applies to both new loans and loan increases of $10k. Offer ends 15 August 2024. There is a limit of one cashback per loan per customer within an 18 months period. Cashback will be paid within 120 days of drawdown. Eligibility, ANZ’s credit assessment criteria, T&Cs, fees and charges apply.
ING Personal Loan Finder award winnerFixed2 - 7 Years $5,000 - $60,000	Interest Rate (p.a.) 6.89% to 18.99%	Comp. Rate (p.a.) 7.10% to 19.23%	Application Fee $150	Monthly Fee $0	Monthly Repayment	Go to siteMore Info Compare

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What features should you look out for in a $20,000 car loan?

Some of the features you should look out for in a car loan include:

• Interest rates. Whether or not the interest rate is low is easy enough to spot. However, there is a difference between a fixed rate loan and a variable rate loan. A fixed rate loan has the same rate throughout the duration of the loan and offers peace of mind as your repayments remain the same. A variable rate loan fluctuates with the market and allows you to make extra repayments and redraw from them as necessary.
• Fees. The fees that are associated with the loan is another consideration. No monthly fees are most beneficial. Two potential extra costs to watch out for are application fees and late repayment surcharges.
• Balloon payments. It's important to know if you’re required to pay a balloon payment at the end of the loan. It means you are required to pay whatever is left on the loan when the term ends, possibly thousands of dollars.
• Repayment flexibility. Whether or not your loan offers repayment flexibility is a feature to look out for. Some lenders allow you to tailor your repayment schedule to your cash flow, so you are able to pay weekly, fortnightly or monthly.
• Do you own the vehicle? Owning the vehicle outright is important to consider as well. Although you might think you own the vehicle, this may not be the case depending on what type of loan you’ve decided to go with. Ensure that you own the vehicle if this is something you desire.

New vs used

There’s always going to be a new versus used vehicle debate. With a new vehicle, there is the peace of mind that comes with owning a brand-new car, like service warranty, no possibility of previous damage and let’s not forget that new-car smell. However, cars depreciate at a steep 40% in the next three years after owning a vehicle.

With a used car, you are able to benefit from a lower price if you get a well-maintained vehicle. While there is also the risk of going through a private sale and possibly not getting what you’ve paid for, this is less likely if you go through a registered motor vehicle reseller.

What are the main points to consider before you apply?

Some main points to consider before applying for the car loan include:

• The loan cost. Although it might seem like you only owe $20,000, this isn’t entirely true. Once you factor in monthly fees, the cost of the interest rate that is applied to the loan and any late fees you might incur, this amount goes up considerably.
• Personal situation. Suppose you come into some extra cash that you want to put towards your car loan. Have you chosen a loan that allows you to make additional payments? Is there a fee if you do? These are all important considerations.
• Your employment situation. Is your current employment situation stable? Are you able to salary sacrifice in order to pay off your loan quicker? It's always beneficial to know these answers before applying for a loan.
• Can you maintain a vehicle? In terms of a car’s running costs, factoring in the cost of fuel, insurance, vehicle registration, paying for your driver's licence and covering general vehicle servicing (if everything is running smoothly) expenses can add up quickly.

Have more questions about $20,000 car loans?

Should I get a secured or unsecured loan?

Ultimately, this is up to you. If you are able to put forward an asset as security, you can score a lower interest rate. However, if you don’t have an asset or are worried about losing the asset you’re putting up as security, an unsecured loan is a better option.

How old can my car be if I want to put it against my loan?

This depends on the lender. Some car loans will only accept cars that are a maximum of seven years whereas others don’t care how old the car is. Find out more in our used car loans guide.

What’s the maximum loan term for my car loan?

The maximum loan term varies between lenders. Some lenders will offer a five-year loan term whereas others will offer a ten-year loan term. Look into a variety of car loans and choose the one with the loan term that best suits your needs.

Picture: Shutterstock

Written by

Courtney Allan

Graduate publisher

Courtney Allan was a writer at Finder covering personal finance. She has written for a number well-known publications and companies including the NRMA. See full bio