I am looking for finance for a new car. I have been offered a loan with interest rate 4.9%, as a “chattel mortgage”. I’m unclear what this is precisely. Is there a downside? Any info appreciated.

TIA

https://www.strattonfinance.com.au/car-finance/options/chattel-mortgage.aspx

Seems to be the same thing I had for my car. I had no issues with it.

Having said that, I don’t know how it differs from a regular car loan.

Divine Angel said:

https://www.strattonfinance.com.au/car-finance/options/chattel-mortgage.aspx

Seems to be the same thing I had for my car. I had no issues with it.

Looks like it is a secured car loan. There will be terms and conditions to the loan along the lines of insurance and regular service intervals etc.

neighbours rooster be crowing
just blew first school siren soundin’
dogs done walked me’n settlin’
and now little ol’ restin’, he coffeein’

Just be aware of any balloon payments at the end of the finance period and have a plan on how you are going to manage it. It may also be worth looking to see if you can get access to all inclusive financing options that cover servicing, tyres, insurance, registration even fuel and looking at the pros and cons.

A chattel mortgage is simply a loan financed by the seller. They keep ownership of the goods until it is paid out in full but you can treat it as your own. You usually cannot sell the goods without vendor’s permission. If you default, they take the goods back.

We used to set these sort of things at a previous business I worked for. The business manufactured industrial equipment. To assist in selling the equipment, the business would arrange the finance so the customer didn’t have the hassles of organising a lease or loan for the machinery.

It may or may not be an advantage for your taxable income if you use your car to generate income. See you accountant if you think you can claim car expenses.

A mortgage is a charge over an asset to secure a loan, so that a lender can seize said asset and sell it to recover the debt owed in case of default, without having to drag you through the courts. A chattel mortgage is a mortgage over a chattel, and a chattel is pretty much any movable or portable personal property (i.e not land or real estate). Id it’s for a car loan, basically they can repossess and sell your car it you default on the loan.

An ordinary personal loan is usually unsecured, and the lender can’t seize your assets to reclaim the debt. They’d have to drag you through the courts and get a court order awarded against you to pay the debt by a certain date, then if you still didn’t they’d have to further apply for the sheriff to come by and seize your property and auction it off at public auction and blah, which is usually not worth their while.