Asset finance can help you obtain your new asset sooner. It allows you to hire or lease an asset without having to purchase it outright. Asset finance for personal and business use has benefits that include: 

•   Potential  reduction of larger loan costs
•   Freeing up of capital
•   Improvements to your cash flow
•   Gets you your new asset quicker

If your business relies heavily on tools, equipment, and machinery,  equipment finance can provide some great benefits. It can be used to fund assets such as:  

•   Work tools
•   Trade tools
•   Office computers
•   Heavy machinery
•   Farming equipment

At the end of a loan, you may be required to pay a balloon payment (if agreed upon at the beginning of the loan). A balloon payment refers to a lump sum of money owed to the lender. This option is popular for consumers who want to decrease their monthly repayments and can be negotiated with your lender. 

How much your balloon payment is depends on your lender. However, the maximum you’ll need to pay for this repayment is capped at 50 per cent of the total loan amount. This means if you have a 50 per cent balloon on a $30,000 car loan, you will pay a balloon payment of $15,000 at the conclusion of your loan.

Your loan term is something that you’ll need to discuss with your lender. For asset finance, the maximum loan term you can have is seven years, but it can be anything from one to seven years. Be wary that the longer your loan term, the more interest you’ll pay.

A car loan and novated lease have some key similarities but also some points of difference. 

•   They both require regular repayments.
•   They both have the option to include a balloon payment at the conclusion of the loan.
•   A novated lease is a three-way deal between you, the lender, and your employer.
•   With a car loan, you own the vehicle from day one.
•   With a novated lease, you own the vehicle when the loan term ends, and once you’ve paid the balloon.
•   A car loan is paid with after-tax earnings and a novated lease from pre and post-tax pay.