When it comes to financing a car purchase, five years is one of the most common term lengths for a loan. This is partly because shorter terms of one to three years offer the lowest interest spend but the highest repayments, while longer terms up to seven years come with the lowest repayments but the highest interest spend.
It’s worth understanding how much your repayments will cost, as well as the amount you pay overall, before you sign on the dotted line for your five-year car loan.
Five-year car loan interest rates
As of 8 July 2025, the cheapest car loan interest rates available on five-year car loans through Savvy's partnered lenders are:
| Lender | Minimum interest rate | Minimum comparison rate |
|---|---|---|
| Angle Auto | 5.50% p.a. | 6.56% p.a. |
| Automotive Financial Services | 5.99% p.a. | 7.76% p.a. |
| Firstmac | 6.09% p.a. | 7.22% p.a. |
| Liberty | 6.29% p.a. | 7.84% p.a. |
| Plenti | 6.45% p.a. | 8.00% p.a. |
| Bank of Queensland | 6.48% p.a. | 7.74% p.a. |
| Wisr | 6.54% p.a. | 8.04% p.a. |
| Pepper | 6.59% p.a. | 7.93% p.a. |
| Metro | 6.64% p.a. | 7.96% p.a. |
| Branded Financial Services | 6.80% p.a. | 8.06% p.a. |
| RACV | 7.29% p.a. | 8.00% p.a. |
| Now Finance | 7.70% p.a. | 8.41% p.a. |
| Note: rates are calculated based on a $30,000, five-year car loan for a new vehicle bought by an asset-backed applicant. Rates may change based on factors such as income, employment, credit history, choice of vehicle and more. | ||
How much are the repayments on a five-year car loan?
The amount you’ll have to pay each week, fortnight or month for your five-year car loan depends on a range of factors. The following table shows how much you can expect to pay based on different loan amounts:
| Loan amount | Loan term | Interest rate | Monthly repayment | Total interest |
|---|---|---|---|---|
| $20,000 | Five years | 5.50% p.a. | $383 | $2,922 |
| $30,000 | Five years | 5.50% p.a. | $574 | $4,383 |
| $50,000 | Five years | 5.50% p.a. | $956 | $7,304 |
| $75,000 | Five years | 5.50% p.a. | $1,433 | $10,956 |
| Calculations are for illustrative purposes only. Interest rate based on lowest rate available through Savvy as of 8 July 2025. | ||||
As you can see, your repayments and interest outlay will increase alongside the size of your loan. Your car loan interest rate, fees and repayment frequency will also influence how much you pay overall.
However, another variable that’s important to explore is the impact of a balloon payment. This is a lump sum reserved for the end of your loan which you’ll pay to your lender to round out your loan instalments. You can see the impact a balloon payment has on a five-year car loan here:
| Loan amount | Loan term | Interest rate | Balloon payment | Monthly repayment | Total interest |
|---|---|---|---|---|---|
| $30,000 | Five years | 5.50% p.a. | 0% | $574 | $4,383 |
| $30,000 | Five years | 5.50% p.a. | 30% | $434 | $5,028 |
| Calculations are for illustrative purposes only. Interest rate based on lowest rate available through Savvy as of 8 July 2025. | |||||
While adding a 30% balloon payment will save you almost $150 per month in the example above, you’ll end up paying close to $650 extra in interest over the course of the loan.
Why apply for a car loan with Savvy?
Car Loan Repayment Calculator
Your estimated repayments
$98.62
| Total interest paid: | Total amount to pay: |
| $1233.43 | $5,143.99 |
How to apply for a five-year car loan with Savvy
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Fill out our simple online application
First and foremost, complete our simple online application. This lets us know about you, your profile (including your income, employment and credit history) and the loan you’re after.
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Submit any necessary documentation
We may need additional documents to verify the information you provide us with, namely your income and employment information. These are submitted through our online portal.
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Speak to your broker about your options
One of our friendly car loan brokers will give you a call to speak with you about your application and the next steps that you can take with us.
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Find your car (if you haven’t already)
If you’re still looking for your car, we can help you find that, too! Our in-house car broker, Vehicles Direct, has relationships with dealerships across the country to help you secure a great price.
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Have your application prepared and submitted
Once you’re happy with it, we can prepare the application for formal submission on your behalf. At this step, you can sit back and let your experienced broker handle the rest.
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Receive formal approval and settle the loan
If your application is approved, you can sign all the loan documents electronically and we’ll sort out settlement. All that’s left to do is to have the funds paid to your vendor and receive your car!
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Five-year car loans vs seven-year car loans
When you take out your car loan, you may have the option to choose any term between one and seven years. If you’re settled on a longer term but tossing up between five and seven years, there are a few things to consider:
- Repayments: seven-year loans come with lower repayments than those with five-year terms, leaving more room in your monthly budget.
- Interest paid: the longer you take to repay your loan, the more interest you’ll pay. As a result, five-year loans are cheaper than seven-year loans.
- Approval chances: if you’re an applicant with a strong profile and credit score, there’s unlikely to be much difference between the two in terms of the likelihood of approval. However, for those buying a car who don’t have a strong credit score or borrowing history, seven-year terms may be less likely to be approved.
- Total debt period: it may seem obvious to say, but it’s worth considering that opting for a five-year term means your car will be debt-free two years sooner.
- Early repayments: car loans don’t tend to come with free early repayments, so if you decide you want to pay out your loan ahead of schedule, having a longer loan term may set you back more.
- Resale factor: selling a vehicle under finance isn’t impossible, but it does make it trickier. The longer your loan term, the longer you’ll have to wait to sell your car (or the more you’ll pay in early termination fees).
Is five years a good term length for a car loan?
Ultimately, whether five years is the right car loan length for you depends on your specific circumstances.
There are clear benefits of choosing this term. For one, as mentioned, you can pay off your loan at a steadier pace than some shorter terms while not having to pay as much as you would for a seven-year term. It’s also a term offered by virtually all lenders. While some enforce higher minimums and lower maximums, five years will always be an option.
However, on the other hand, you’re still paying more in interest than you would for any term between one and four years. Another factor that you’ll need to consider is the age of the vehicle. Because lenders have maximum allowable ages for your car at the end of your term, five years may not be approved if you’re buying a used car from a private seller. This may be the case if the vehicle is already eight years old and the age limit is ten years, for instance.
Choosing your car loan term is often about striking the right balance between comfort in repayments and savings on interest. You can speak with one of our friendly brokers about your car loan options if you want to find out more information.
