Stretching a car loan out to seven years in length is one of the most effective ways to make your monthly instalments more affordable. Compared to a loan of five years or less, you’ll have more room in your budget at the end of each month.
However, before you apply for your loan and choose your term, it’s worth noting that seven-year car loans are not only the most expensive overall but also not available to applicants of all financial backgrounds.
Seven-year car loan interest rates
As of 11 July 2025, the cheapest car loan interest rates available on seven-year car loans through Savvy's lending partners are:
| Lender | Minimum interest rate | Minimum comparison rate |
|---|---|---|
| Angle Auto | 5.50% p.a. | 6.56% p.a. |
| Firstmac | 6.09% p.a. | 7.22% p.a. |
| Wisr | 6.29% p.a. | 7.56% p.a. |
| Liberty | 6.29% p.a. | 7.84% p.a. |
| Bank of Queensland | 6.48% p.a. | 7.74% p.a. |
| Automotive Financial Services | 6.49% p.a. | 8.03% p.a. |
| Metro | 6.64% p.a. | 7.96% p.a. |
| Branded Financial Services | 6.80% p.a. | 8.06% p.a. |
| Plenti | 6.95% p.a. | 8.25% p.a. |
| Pepper | 7.09% p.a. | 8.22% p.a. |
| RACV | 7.79% p.a. | 8.32% p.a. |
| Now Finance | 7.79% p.a. | 8.31% p.a. |
| Note: rates are calculated based on a $30,000, seven-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 seven-year car loan?
There’s a range of factors that impact the cost of your seven-year car loan’s repayments, including the size of the loan and its interest rate. You can see in the table below how much of an impact small differences in rate can have on a $40,000 car loan:
| Loan amount | Loan term | Interest rate | Monthly repayment | Total interest |
|---|---|---|---|---|
| $40,000 | Seven years | 5.50% p.a. | $575 | $8,284 |
| $40,000 | Seven years | 6.00% p.a. | $585 | $9,085 |
| $40,000 | Seven years | 7.00% p.a. | $604 | $10,712 |
| $40,000 | Seven years | 8.50% p.a. | $634 | $13,211 |
| Calculations are for illustrative purposes only. Rates aren’t necessarily representative of the interest rate you’ll be offered on your car loan. | ||||
Even securing a loan at 6.00% p.a. compared to 7.00% p.a. could see a total interest saving of over $1,600, despite only representing a $19 saving per month. This is because interest is charged based on your outstanding balance, meaning the longer you take to pay it down, the more you’ll pay.
When it comes to car loans, another option that some may decide to take up is a balloon payment. Also known as a residual payment, these are paid out at the end of your loan, acting as a sort of reverse deposit. This table shows how a 20% balloon will affect the cost of a $40,000, seven-year car loan:
| Loan amount | Loan term | Interest rate | Balloon payment | Monthly repayment | Total interest |
|---|---|---|---|---|---|
| $40,000 | Seven years | 5.50% p.a. | 0% | $575 | $8,284 |
| $40,000 | Seven years | 5.50% p.a. | 20% | $497 | $9,707 |
| Calculations are for illustrative purposes only. Interest rate based on lowest rate available through Savvy as of 11 July 2025. | |||||
As you can see here, adding a balloon payment will give you more breathing space each month, but will ultimately set you back more than an extra $1,400. That’s why it’s important to carefully consider whether the monthly payment reduction is worth it in return for the costlier interest outlay.
Why apply for a car loan with Savvy?
How to apply for a seven-year car loan with Savvy
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Complete our online application form
Start the process by filling out an online application. You’ll give us details about yourself, such as your financial profile, employment and more, as well as the loan and car you’re looking for.
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Send through any required documents
As part of our assessment, we may request further documentation to be submitted via our online portal to verify certain aspects of your application, such as your income and employment.
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Have a chat about the next steps with your broker
Once we have all the information we need, one of our brokers will compare the options available to you in our lender database. They’ll give you a call to discuss what we might be able to do for you.
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Get a hand with finding your car (if you don’t already have it)
Our in-house car broker, Vehicles Direct, is here to help you secure a great deal on your car purchase price through its national dealer network. If you haven’t found your ideal model yet, we can lend a hand.
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Have your application submitted for formal assessment
Your broker will take the reins on your application and complete and submit it on your behalf to the lender. They’ll keep you informed on any updates throughout this process.
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Receive formal approval and sign off
If your application is formally approved, you’ll be sent all the forms to sign electronically and we’ll handle the loan’s settlement. After you’ve done this, the funds can be sent to the vendor and you can receive your new or used car!
What our customers say about their finance experience
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Can I pay off my car loan in less than seven years?
Yes – it’s possible to pay off your car loan ahead of schedule. However, in most cases, you’ll be required to pay a potentially hefty early termination fee if you do so. This fee might outweigh the benefit of clearing your debt early, so it’s important to find out how much it might cost before you pay it off.
At Savvy, we’re partnered with lenders who can offer free additional repayments and no early termination fees. You can speak with one of our brokers about whether you have any options open that offer early repayments without penalty.
Is seven years too long for car finance?
Whether seven years is too long or the right term for your car loan will come down to your profile and needs. The main reason why you’d want to take seven years to pay off your car loan is to minimise your fortnightly or monthly payments. You might look to do this if you’re a low income earner or have other debts you’re juggling, such as a mortgage.
However, if you’re able to comfortably pay off your loan over six or five years, for example, without it impacting your finances too much, you’re better off choosing a shorter term. While a $40,000 car loan at 5.50% p.a. over seven years will cost $8,284 in interest, the same loan over five years will only cost $5,843. This only comes with a monthly repayment of less than $200 more, or under $50 per week.
The other factor to consider is that if your credit score isn’t the strongest, you might not have the option to take seven years. With past defaults or other black marks on your credit report, lenders will deem you a greater risk and therefore aren’t likely to offer longer terms.
Car Loan Lenders We Work With
