Chattel Mortgage Explained

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Car Finance - Car Lease - Platinum Direct​

Chattel Mortgage Explained

If you’re going to take out car loan, you’re going to owe interest every month on the loan. Since a car is a fairly big purchase, this interest can really start to add up. This is why it is so important to choose the right type of financing.

One low-interest loan option in Australia is the chattel mortgage. Creditors are willing to accept a lower interest rate of these loans because of the way they are set up. Does a chattel loan make sense for you? The information and tools in this article will let you know.

What is a Chattel Mortgage?

A chattel mortgage is an old type of loan agreement. These are commonly used by businesses for equipment and company cars, but can also be used by individuals to buy cars. When you take out a chattel mortgage, your creditor gives you the money you need to completely buy your car.

In exchange, the creditor will take out a mortgage against your car that you will need to pay off with interest. At the end of the mortgage, you’ll own the car 100%. If you can’t make your payments, the lender will seize your car instead.

Benefits of a Chattel Mortgage

The main benefit of a chattel mortgage is that is has a relatively low interest rate. Since this loan is se secured by your car, lenders are willing to give a more competitive interest rate. Chattel mortgages are also useful because they have fixed payments. Both the loan interest rate and the amount you’ll pay each month are fixed so you won’t get any surprises down the road.

Lastly, you have some flexibility in setting up your loan. Is money tight today but shouldn’t be an issue in the future? Then you can set up your chattel mortgage with a balloon payment at the end. Your monthly payments will be lower because you are going to make a large final payment at the end.

Chattel Mortgage Calculator

The best way to see if a chattel mortgage makes sense for you is to use the Platinum Direct chattel mortgage calculator. The Platinum Direct chattel mortgage calculator is a free online tool that shows you what you would pay from this type of financing. This gives you a quick and easy way to compare this cost against the cost of other financing options.

To get a chattel mortgage estimate, you just need to enter in a few pieces of information like the amount you want to borrow, the amount of time you want to pay off the loan, the amount of a balloon payment you want to make (put 0% if you don’t want one), and the interest rate you think you’d qualify for. The calculator will immediately tell you how much you should expect to pay with a chattel mortgage.

If the numbers for a chattel mortgage look good and you want to learn more, contact a Platinum Direct team member or a qualified car loan dealer. He or she will be able to explain this program in more detail plus help you find the very best rate for your chattel mortgage.

If you would like to apply for a chattel mortgage, or would simply like to learn more about a chattel mortgage visit Platinum Direct.