As a Victorian Bank, Bank of Melbourne only exists in Victoria. That means all of the bank’s branches and ATMs are located within Victoria, its staff are Victorian, and its main focus is, yep, you guessed it, Victoria.
But is it the right bank for you? If you happen to reside in Victoria, Bank of Melbourne may just be the bank for you. It offers a wide range of products, and it has extensive plans to expand within the state, while investing in the local economy over the coming years.
However, the bank also understands its customers may want to travel outside of Victoria now and again. Luckily, Bank of Melbourne sits with St.George and BankSA under the Westpac group’s far-reaching umbrella, working together as part of Australia’s largest regional banking network.
That means Bank of Melbourne customers can use St.George and BankSA ATMs when travelling inter-state, plus, they also have the peace of mind that comes with being linked with Australia’s first and oldest bank.
Bank of Melbourne offer car loans across Australia
So, what about car loans? When selecting a bank, it’s obviously important to choose one that has branches and ATMs nearby. When choosing a car loan provider, those kinds of priorities aren’t such a big deal.
While Bank of Melbourne may be a bank for Victorians, it is also a car loan provider for Australians – no matter where they happen to be in the country. So, no, you don’t have to live in Victoria to apply for a car loan with Bank of Melbourne.
Bank of Melbourne offers a secured personal loan for customers looking to buy a car, who need to borrow $3,000 to $80,000. Whether it’s a new or used car, whether it’s your first car or you’re looking to upgrade, you could get the car loan you need from Bank of Melbourne – depending on your circumstances, of course.
What kind of car loans are on offer?
First up, let’s talk about what it means to take out a secured car loan. In terms of security – or collateral – there are two types of loan.
A secured loan – like the one on offer from Bank of Melbourne – is secured against some form of collateral. With a car loan, the collateral is usually the car being purchased.
By taking some form of collateral, the lender can feel more ‘secure’ offering the loan. The lender know that if worst comes to worst and the loan is not paid, the collateral can be collected to make up for any losses.
With this security, the lender can offer lower interest rates than on an unsecured loan, which can make choosing a secured loan a more affordable option for car buyers.
On the other hand, an unsecured loan is not secured against any form of collateral. While some car buyers may feel safer choosing a loan not secured by their shiny new car, they may end up paying more in the long run with higher rates of interest.
Variable Rate vs. Fixed Rate
When deciding whether a car loan is affordable, an important factor to consider is whether a fixed rate or variable rate loan is better. Bank of Melbourne offers a variable rate car loan over a term ranging between one and seven years, and a fixed rate car loan over one to five years.
With a variable rate loan, the interest rate applied to the loan changes over time. The lender will raise and lower its variable rates in accordance with the market. That means the initial repayment amount may be very different to the repayment amount a few years down the line.
For the borrower, this can be beneficial – and also, not so beneficial. If interest rates fall, so do repayment amounts. However, if they increase, repayments will also increase. However, with a fixed rate loan, the interest rate is fixed for the life of the loan.
This allows the borrower to budget effectively, always knowing the exact repayment amount. It also protects the borrower should interest rates rise, but it can mean he loses out if they fall.
In terms of Bank of Melbourne loans, its variable rate car loan offers more flexibility than its fixed rate car loan. With the variable rate loan, borrowers can choose to pay off the loan sooner (with applicable fees), with a redraw facility available, should they need it.
What do you need to know about fees?
As with most car loans, Bank of Melbourne car loans have a variety of fees attached. If you take out a Bank of Melbourne car loan, whether variable or fixed, you will pay an establishment fee and a monthly administration fee.
When comparing loans and working out whether they are affordable, always take these fees into account. Also make sure to read the fine print to find out about any other fees that may apply, such as the prepayment fees or break costs that are associated with paying off a loan early.