Plain-English definitions of common finance terms to help you apply with confidence.
Motor and asset insurance is written on either an agreed or market value basis. Under an agreed value policy, you and the insurer lock in a fixed payout figure for the asset upfront. Market value cover instead bases the payout on the asset's make, model, age and condition at claim time — and agreed value figures tend to come in higher than market value equivalents.
Amortisation is the process of spreading a loan's repayments evenly across the finance term. Under a fully amortising structure, every repayment chips away at both principal and interest, bringing the balance down to zero by the end of the term.
The APR expresses the cost of borrowing as an annual percentage, based purely on the interest charged. It generally excludes upfront and ongoing charges like establishment or account-keeping fees. For a true like-for-like compare rates comparison between loans, look at the comparison rate instead, which folds in most fees alongside the APR.
Asset finance is how Australian businesses fund vehicles, machinery, tools, equipment and fit-outs without draining cash reserves upfront. By spreading the cost of the asset over time instead of paying it in full at purchase, businesses free up working capital to grow faster. Learn more about our equipment finance options.
An ACL is the authorisation ASIC grants to individuals or businesses to lawfully carry out credit activities — this covers providing credit under a contract or lease, or acting as the go-between for a lender or lessor and a borrower. It's worth noting the licence check is a snapshot assessment of the licence holder at a point in time, not an ongoing endorsement, and it doesn't extend to vetting every owner or staff member of the business. Learn more about how we work with licensed finance brokers.
A track record of missed or overdue payments on a credit file typically earns someone a "bad credit" label in a lender's eyes. Running credit cards near their limit consistently can have the same effect. The practical result is usually a lower credit score, which makes borrowing harder and, where credit is offered, more expensive. Explore our bad credit car loans.
Common in asset and vehicle finance, a balloon loan structures the deal so a lump sum falls due at the end of the term rather than being spread across regular repayments. Borrowers reaching that point typically either pay out the balloon in full or refinance it into a new loan — though it's worth flagging that a refinance won't necessarily carry over the original interest rate. See our balloon payment options.
Bankruptcy is a court-issued declaration that someone cannot meet their debts. Lenders may pursue this route after a default on a loan as a way of recovering what's owed, though a borrower can also file voluntarily. It does significant short-term damage to a credit file, but it also gives the person a genuine reset to rebuild their finances. Speak to a broker about your options.
A broker is a licensed professional who shops loan products across multiple lenders on a client's behalf. Asset finance brokers commonly have access to 20 to 40-plus lenders and can often negotiate sharper terms than a borrower would get approaching a lender directly — and working with a specialist broker through our service comes at no cost to you. Meet our expert brokers.
A car loan is a finance product where funds are advanced specifically for a vehicle purchase, with the vehicle itself used as security for the loan. Compare our new car loans and used car loans.
Adding a co-borrower to a loan means a second person's name, income and credit history are attached to the application, with both parties equally liable for repaying the debt. This arrangement can be the difference-maker for a borrower who wouldn't qualify solo, or who wants access to sharper terms than they'd secure on their own. See our personal loans.
This is simply the day a loan officially begins — typically the date the funds land in the borrower's account.
Under a commercial hire purchase arrangement, a business effectively hires a vehicle from the financier, making fixed monthly payments over an agreed term rather than purchasing outright from day one. Learn about business vehicle finance.
Combining the interest rate with the bulk of a lender's fees, the comparison rate gives borrowers the clearest apples-to-apples view when weighing up loan products. A headline low interest rate can sometimes mask heavier fees elsewhere, which the comparison rate exposes. Use our tool to compare rates from 30+ lenders.
CCR arrived in 2017 and reshaped how credit bureaus build a person's score. Rather than a system that only penalises negative history, CCR also factors in and rewards consistent, positive repayment behaviour. Read more about your credit score on our blog.
When a lender gives a conditional offer, they've greenlit the application but with strings attached — usually a request for supporting paperwork such as ID, payslips or other proof of income and employment before final sign-off. Ready to get approved?
A credit assessment is how a lender determines whether a borrower can comfortably repay what they're asking to borrow, drawing on bank statements, credit score, borrowing capacity, available security, financial statements, cashflow and trading history. This process applies across business loans, equipment finance, vehicle loans, low doc finance and invoice finance.
A credit check is a process a lender uses to assess the suitability of a loan application, whether by leaning mainly on the credit score alone or reviewing the full credit history, including CCR information, before deciding to approve or decline. Apply now to find out where you stand.
This is a category of consumer safeguard aimed at protecting the credit standing of both borrowers and lenders. In practice, it works by curbing lending practices that could unfairly damage a consumer's ability to access credit down the track, including anything that could unjustly knock their credit score. Read about our responsible lending approach.
A single number summarising a person's creditworthiness, drawn from their credit file. Because credit bureaus each apply their own weighting to different factors, the same borrower can see slightly different scores depending on which bureau is asked. Read more about your credit score on our blog.
Your credit utilisation rate is the percentage of your available credit that you're using at a given time. As an example, a combined $30,000 credit limit with $15,000 owing sits at 50% utilisation. Running a high utilisation rate can flag potential financial strain to lenders and drag down a credit score, so it's a metric lenders scrutinising credit history tend to watch closely. Use our calculator to improve your borrowing power.
A dealer invoice is the formal sale record a licensed dealer issues when a vehicle or piece of equipment changes hands. It sets out the purchase price, GST breakdown, VIN or serial number, build specs, PPSR status and the dealer's licence details. Lenders rely on this document for the vast majority of vehicle finance, equipment finance and low doc finance applications. See our car loans.
This form of refinancing rolls several existing debts into a single new loan. Provided no fresh debt is added on top, the borrower ends up with just one repayment instead of many — and often benefits from a lower rate, smaller repayments, or a shorter path to being debt-free. Explore our debt consolidation loans.
This ratio shows what share of monthly income is swallowed by debt repayments. If someone earns $5,000 a month and pays $2,000 toward credit obligations, their ratio sits at 40%. Lenders generally favour a lower figure here, reading it as a sign of lighter credit utilisation and stronger financial discipline.
A default occurs when repayment terms on a credit contract aren't met. Lenders won't usually issue a default notice over a single missed payment, but a run of missed consecutive payments will trigger one. It's a significant mark against a credit file and can be the opening move toward court proceedings or bankruptcy. Explore our bad credit car loans.
This describes an agreed pause on scheduled repayments, negotiated with the lender for whatever reason applies. A common example is a "repayment holiday" of one to three months offered at the start of a loan — meaning the very first repayments are deferred from day one. See our flexible repayment options.
Some lenders levy an ERC when a borrower pays out their loan ahead of schedule. Because lenders can't predict who will do this in advance, ERCs sit outside the comparison rate calculation. The amount and conditions vary widely by lender, with some only applying the charge within a set window after the loan begins. You'll also see this called a termination, discharge, or early repayment fee.
When a vehicle is described as encumbered, it means there's still a loan balance owing against it, and the financier has formally registered an interest in the asset to protect their position. See our used car loans.
Equipment finance covers loans or leases used to fund business equipment — machinery, tools, fit-outs, vehicles or technology — letting a business spread the cost rather than paying it in full at the outset. Chattel mortgages, hire purchase arrangements and finance leases are the most common structures used. Explore our equipment finance.
A one-time charge applied at loan settlement, generally captured within the comparison rate. If a lender advertises no establishment fee, it's worth scanning their broader fee schedule and comparison rate — the saving is sometimes offset by higher costs elsewhere. We offer no hidden fees.
The scheduled end date of a loan, assuming every repayment has been made on time throughout the term.
This document sets out every fee a lender charges and the timing of each. Recurring fees — say, a monthly account fee across a 48-month loan — get built into the comparison rate for all 48 instalments. Fees that only some borrowers ever pay, like an early repayment charge, show up on the schedule but stay out of the comparison rate. See our transparent fees.
With a fixed-rate loan, the interest rate — and therefore the repayment amount — stays locked for the entire term. This suits borrowers who value predictable, unchanging repayments for budgeting purposes. See our fixed rate car loans.
FBT is a tax levied by the Australian Tax Office when an employee acquires a vehicle through a salary packaging arrangement. While the employer is technically liable for paying it, the cost is generally passed back to the employee, and the liability is worked out on an annual basis. Learn about business vehicle finance.
A hard enquiry is another name for a credit check — the formal review a lender runs when assessing a credit application. Hard enquiries leave a mark on a credit file, and racking up several in a short window can meaningfully drag a score down.
This Australian tax measure lets eligible businesses claim an immediate deduction for the full cost of qualifying new or used assets in the year they're first used or installed — think vehicles, machinery, tools, medical equipment or café fit-outs. It has a significant flow-on effect on decisions around equipment finance, vehicle finance, working capital loans, business lines of credit and invoice finance. See our equipment finance and vehicle finance options.
The percentage cost of borrowing, charged on top of the amount lent, generally quoted as an annual figure (APR). Think of it as the pure "hire cost" of the funds — separate from the comparison rate, which folds in the lender's fees as well. Explore our low rate car loans and calculate your repayments.
This is a loan taken out by two people together, such as partners or spouses, with both equally on the hook for repayment. If one borrower stops paying, the lender can chase the other for the full outstanding amount.
Also called an affordability assessment, this is how a lender works out whether a borrower can realistically service a loan over its full term. The lender weighs up income against expenses to gauge whether the repayments are sustainable for that borrower's circumstances. Check your eligibility.
Loan eligibility refers to the benchmarks a lender uses to determine whether — and how much — an applicant can borrow, typically weighing income, credit score, employment history, and existing debt load. Ticking these boxes strengthens both approval odds and the chance of a sharper interest rate. Find out am I eligible.
A simple online tool for estimating repayments from three inputs — the loan amount, term, and rate — giving borrowers a fast way to gauge total cost and plan ahead before formally applying. Try our loan calculator.
The full stretch of time a loan runs, from the commence date through to the final scheduled repayment. We offer flexible loan terms.
LVR reflects the proportion of an asset's value a lender is prepared to fund, worked out by dividing the loan amount by the value of the asset being financed. Use our tool to calculate your deposit and repayments.
The monthly fee is an ongoing servicing and administration charge, generally folded into the comparison rate — though it's always worth confirming this with a specific lender.
A no-doc facility lets a borrower skip supplying full financials, tax returns or other standard paperwork to secure finance. Because lenders are taking on more risk with less visibility, these facilities tend to suit experienced borrowers or businesses that can otherwise demonstrate a solid cashflow track record. See our ABN car loans and business loans.
A non-bank lender provides finance without holding a banking licence or taking customer deposits, instead sourcing funding through wholesale markets, managed funds or private capital. In Australia, non-bank lenders are regulated by ASIC under a credit licence rather than by APRA, and they frequently pick up borrowers that banks turn away — self-employed applicants or those with a patchy credit history, for instance. See our panel of 30+ lenders.
Some lenders bundle their monthly charges and any additional recurring costs under this catch-all term. As with monthly fees, these are usually reflected in the comparison rate, but confirming this before committing to a loan is worthwhile.
A personal finance broker helps borrowers navigate and access a range of finance products — spanning personal loans, credit cards, and insurance — matching them to a suitable lender. Meet our expert brokers.
A personal loan provides funds that can go toward a vehicle or other purchase, but unlike a car loan, the lender holds no security interest over the item bought. See our personal car loans.
A personal loan lender is the institution or provider a borrower approaches for funds, whether directly or through a broker. Many now offer "rate check" tools that reveal a likely interest rate before a full application is lodged, helping borrowers avoid surprises if the quoted and final rates differ. Compare our lenders.
The core amount actually borrowed — a $10,000 personal loan has a $10,000 principal. The total cost of the loan will run higher once interest, fees and other charges reflected in the comparison rate are factored in.
A private sale involves buying a vehicle or piece of equipment straight from an individual rather than through a licensed dealer. From a finance perspective, these carry more risk since there's no dealer warranty, no statutory consumer protections, and no formal dealer paperwork backing the transaction. Lenders often ask for extra verification on private sales — a PPSR check, VIN confirmation, roadworthy certificate, and ID from the seller are all common requirements. See our used car loans.
The official cash rate set by the Reserve Bank of Australia at any given time. This rate only feeds through to your borrowing costs if you're on a variable-rate loan.
Refinancing means swapping an existing loan or finance facility for a new one — typically to lock in a better rate, restructure the repayment terms, or merge several debts into one simpler facility. Refinance your car loan.
A secured loan requires the borrower to pledge an asset — commonly a vehicle or other high-value item — as security against the debt. Miss your repayments, and the lender can repossess and sell that asset to recover the loan. Because the lender's risk is lower, secured loans often come with higher borrowing limits and more competitive rates. See our secured car loans.
Settlement marks the point where formal approval has been granted and the lender releases the agreed funds to the borrower — paid out either as a cheque or via direct transfer. Get approved fast.
A soft enquiry is a check on a credit file made by the individual themselves or by a business, without being tied to a specific credit application. These do appear on a credit file but carry no weight against the credit score.
An unsecured loan requires no asset as collateral. Because there's nothing for the lender to recover if repayments stop — beyond pursuing the debt through the courts — these loans typically come with lower borrowing caps and higher interest rates than their secured counterparts. See our unsecured car loans.
Certain lenders charge fees payable before funds are released, sometimes even an application fee. These are usually captured in the comparison rate, but it's always worth confirming this is the case for a specific loan. We offer no upfront fees.
A variable-rate loan means the interest charged can shift throughout the term, tracking movements in the RBA base rate — so repayments may rise or fall along the way. Less predictable for strict budgeters, but variable rates can work out cheaper over the life of the loan. Keeping an eye on the direction of the cash rate is worthwhile before locking into this structure. Use our calculator to model your repayments.
Vehicle finance is business funding used specifically to acquire cars, utes, vans or other commercial vehicles for work purposes. It ties in closely with loan servicing, borrowing capacity, asset finance more broadly, and the applicant's credit file — and it's common for businesses to run a dedicated vehicle finance facility alongside a wider business finance strategy to keep working capital intact. Learn about business vehicle finance.
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