Top 5 Tips for Securing a Low-Interest Car Loan

Get behind the wheel sooner - with a smarter loan strategy from AFS.

Buying a car is a big step - whether it's your first set of wheels, an upgrade, or something to support your lifestyle or business. But while most people focus on the price of the car, what you'll pay in interest on your loan can significantly impact the total cost over time.

At AFS, we've helped Australians secure the right car loans for over 30 years. We know that getting a good deal isn't just about the vehicle - it's about the finance that makes it happen. That's why we're sharing our top five tips to help you lock in a low-interest car loan and feel confident every step of the way.

1. Know Your Credit Score - and Improve It if You Can

Before you apply for any car loan, it's a smart move to check your credit score. Your credit history is one of the main factors lenders consider when setting your interest rate. The better your score, the lower the risk you appear—and that can translate to a lower interest rate.

If your credit score is high, you’re more likely to be offered competitive rates. But if it’s not quite where you want it to be, don’t stress. There are steps you can take to improve it:

• Pay all bills on time
• Reduce your credit card balances
• Avoid applying for multiple loans or credit accounts at once
• Check for errors on your credit report and fix them

At AFS, we encourage all customers to know their financial position before applying. Our team is here to help you understand how your credit history may affect your options—and how to position yourself for success.

Choose a Shorter Loan Term

The length of your loan plays a big role in the total amount of interest you’ll pay. A shorter loan term—say, three years instead of five—means less time for interest to accrue. As a result, many lenders offer lower interest rates on shorter-term loans.

Of course, shorter terms mean higher monthly repayments. But if you can afford the larger payments, you’ll save more in the long run. Here’s how it breaks down:

• Short term = Higher monthly repayments, but lower overall interest
• Long term = Lower monthly repayments, but more interest paid over time

At AFS, we offer flexible loan terms to suit a range of budgets and goals. We’ll work with you to find the right balance between affordability and total cost—so you stay in control of your repayments without overextending.

Put Down a Larger Deposit

A bigger deposit isn’t just about reducing the amount you need to borrow—it’s a signal to lenders that you’re financially stable and serious about the purchase. This reduces the lender’s risk, which can lead to more favourable loan terms, including lower interest rates.

Even if a deposit isn’t required, having one can still work in your favour. Here’s why:

• You borrow less
• Your repayments are smaller
• You pay less interest over the life of the loan
• You may qualify for better rates

At AFS, we encourage customers to save for a healthy deposit if possible. It’s a smart move that can give you more options and make your loan even more manageable.

Consider a Secured Loan

When it comes to interest rates, the type of loan matters. Secured car loans—where the car itself is used as collateral—often come with lower interest rates than unsecured loans. That’s because the risk for the lender is lower. If repayments aren't made, the vehicle can be reclaimed to recover the funds.

If you're comfortable with the idea of a secured loan, it can be a great way to reduce your total interest bill and get access to better loan features.

At AFS, we offer both secured and unsecured loans to suit a wide range of financial needs. Our team can help you weigh up the pros and cons of each, and work out which option fits your situation best.

Get Pre-Approval Before You Start Shopping

Pre-approval is one of the most powerful tools you can have in your car-buying toolkit. It gives you a clear idea of how much you can borrow, what your repayments will look like, and—most importantly—what interest rate you qualify for.

With a pre-approval in place, you can:

• Shop confidently, knowing exactly what your budget is
• Negotiate better deals with dealerships
• Act quickly when you find the right car

At AFS, our pre-approval process is quick and simple. You’ll have a clearer picture of your buying power before you start searching—and that can save you time, stress, and money.

👉 Apply now to get started or use our car loan calculator to see what your repayments could look like based on your loan amount and term.

Final thoughts

There’s no single trick to getting the best interest rate on your car loan—but a combination of smart choices can go a long way. To recap, here are the five key moves:

1. Check and improve your credit score
2. Choose the shortest loan term you can comfortably afford
3. Save up for a decent deposit
4. Consider the benefits of a secured loan
5. Get pre-approved before hitting the car yards

At AFS, we’re here to help you every step of the way. With flexible finance options, competitive rates, and a focus on personal service, we make it easier for everyday Australians to get the right loan for their situation—whether it’s a car, a ute, or something a little more special.

Ready to take the next step? Get started with AFS today and let’s drive your goals forward—on your terms.