For whatever reason, you may be struggling to get approval for a personal loan. It could be because you’ve got bad credit history, you don’t have stable income or you’ve already got a few outstanding debts.

If this is the case, you could use a guarantor to improve your chances of being approved for a personal loan.

In the market for a new car? The table below features car loans with some of the lowest fixed interest rates on the market.

Lender

FixedNew1 year
More details
Approval within 24 hoursEarly payout available
  • Required: Good credit history, stable employment history. Aus citizenship or PR.
Approval within 24 hoursEarly payout available

New Car Loan - Special (Fixed)

  • Required: Good credit history, stable employment history. Aus citizenship or PR.
FixedNew1 year
More details
Approval within 24 hours
  • Save the planet. Save thousands on your car loan.
  • Get a discounted rate if you buy electric
  • Required: Good credit history, stable employment history. Aus citizenship or PR.
Approval within 24 hours

Green Car Loan Fixed

  • Save the planet. Save thousands on your car loan.
  • Get a discounted rate if you buy electric
  • Required: Good credit history, stable employment history. Aus citizenship or PR.
FixedNew99 years
More details
Loan amounts from $2k to $75k
  • Available for any new motorised vehicle
  • No ongoing or early exit fees
  • 1-7 years loan terms. Pay monthly, fortnightly, or weekly
  • Get quick decision. Funds in 24 hrs if approved
Loan amounts from $2k to $75k

New Car Loan

  • Available for any new motorised vehicle
  • No ongoing or early exit fees
  • 1-7 years loan terms. Pay monthly, fortnightly, or weekly
  • Get quick decision. Funds in 24 hrs if approved
VariableNew1 year
More details

New / Demo Car Loan (Variable)

    FixedNew1 year
    More details

    New / Demo Car Loan (Fixed)

      FixedNew, Used99 years
      More details

      New or Used Car Loan Special

        FixedNew, Used7 years
        More details
        No ongoing fees
        No ongoing fees

        Plenti Car Loan (Refinance)

          FixedNew, Used99 years
          More details

          Unsecured Car Loan Excellent Credit

            FixedNew5 years
            More details

            Fixed Car Loan (New)

              FixedNew, Used7 years
              More details

              Secured Car Loan

                VariableNew, Used10 years
                More details

                Car Loan

                  FixedNew, Used99 years
                  More details

                  Car Loan

                    Important Information and Comparison Rate Warning

                    All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

                    The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless indicated otherwise. The comparison rates for car loans and secured personal loans for the relevant amounts and terms are for secured loans unless indicated otherwise. The comparison rates for unsecured personal loans are applicable for unsecured loans only. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

                    Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for the term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. Rates correct as of April 16, 2024. View disclaimer.

                    How does a guarantor personal loan work?

                    A guarantor personal loan is backed by a family member or friend who has agreed to be responsible for the loan repayments if you are suddenly unable to make them. A guarantor basically acts as security for the loan, making it less risky for the lender to lend you money. Because of this, lenders may be more likely to approve your loan application.

                    There are two main types of guarantor personal loans: secured and unsecured.

                    A secured guarantor loan involves the guarantor putting up an asset, such as their car, as security against the loan. Because there is an asset being used as security against the loan, the loan is less risky for the lender which means you could get access to lower interest rates. The downside is that if you default on your loan repayments, the lender could seize the guarantor's asset to pay down the debt.

                    An unsecured guarantor loan means that the guarantor does not need to offer up an asset as security for the loan. This doesn’t mean that you or the guarantor can just get off scot-free if you default on the loan. If you are unable to make the loan repayments, the guarantor will have to step in and make your repayments. If both you and the guarantor default on the loan, the lender can take legal action against you. Because of the added risk, unsecured guarantor loans often attract a higher interest rate.

                    Who can be a guarantor for a personal loan?

                    Lenders have their own specific criteria as for who can be guarantor on a personal loan but generally speaking, most lenders will only allow a borrower’s parents or immediate guardian to be guarantor. Other lenders may accept other relatives, or even friends.

                    Guarantors have to meet the same eligibility criteria as borrowers, which generally includes:

                    • Being over the age of 18

                    • Being an Australian citizen or permanent resident

                    • Having stable income and employment

                    • Having a good credit score

                    • Not being in financial hardship

                    • Being able to prove that you have savings or an asset to use as security against the loan

                    What are the risks of going guarantor on a personal loan?

                    If you’re considering going guarantor on a personal loan for someone, make sure you understand the risks. You’re taking on a big financial responsibility, so it’s important you understand exactly what it is you’re signing up for.

                    Some risks of going guarantor on a personal loan includes:

                    • You may have to pay back the entire debt: If the borrower is unable to make their loan repayments, the responsibility to pay back the loan falls to you. If you’ve put up an asset to be used as security against the loan, such as your car, the lender can repossess this if you can’t make the repayments.

                    • It could prevent you from getting a loan: If you want to apply for loans in the future, you have to tell the lender if there are any loans you’re currently a guarantor on. This can impact your chances of being approved for future loans, even if the loan you’re a guarantor on is being repaid by the borrower.

                    • Your credit rating could be impacted: If you or the borrower default on the loan, this will be marked on your credit file, which could also impact your ability to take out a loan in the future.

                    • You may not be able to use the asset as security for another loan: If you’ve already offered up an asset like your car as security for the loan, you may not be able to use that same asset as security for other loans.

                    • It could damage your relationship: Being a guarantor for someone is risky and if they default on their loan and you’re forced to step in and make the repayments, it could damage your relationship with the borrower. Plus, if your relationship with the borrower suddenly changes, you will still have to make the repayments if they default. This is why it’s really important to consider your relationship with the borrower before agreeing to be their guarantor.

                    Savings.com.au’s two cents

                    Agreeing to be guarantor for someone else can be quite risky, so it’s important to weigh up the pros and cons before you sign up.

                    Before you sign a loan guarantee, make sure you get a copy of the contract from the lender beforehand and that you understand the details and risks involved. It can be better to only guarantee a fixed amount rather than the total loan amount so you know exactly how much you might have to repay if the borrower is unable to do so.

                    Being a guarantor doesn’t always work out and in some cases, you may even be able to challenge a loan contract if you believe you were tricked, misled or pressured into becoming a guarantor, if you had a mental illness or disability when you agreed to become a guarantor, or if you didn’t fully understand the risks involved or the amount you were agreeing to be guarantor for. If this is the case, you can seek free legal advice.

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