Defence Bank Car Loan

Learn about the finer details of Defence Bank car loans right here with Savvy today.

Written by 
Thomas Perrotta
Thomas Perrotta is the managing editor of Savvy. Throughout his time at the company, Thomas has specialised in personal finance, namely car, personal and small loans, although he has also written on topics ranging from mortgages to business loans to banking and more. Thomas graduated from the University of Adelaide with a Bachelor of Media, majoring in journalism, and has previously had his work published in The Advertiser.
Our authors
, updated on April 10th, 2024       

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Defence Bank (formerly Defence Force Credit Union) is an Australian financial institution which offers loan and banking products to members of the Australian Defence Force, as well as other non-members around the country.

One of these loan products is a car loan, so it’s important to get in-depth with all the different features and conditions you could experience before you commence the application process. It’s crucial to survey the market to ensure you’re getting the best available deal.

Fortunately, Savvy compares a wide variety of car loans and delves into the ins and outs of each offer, including that of Defence Bank, to ensure you’re best placed to make the right call on the best car finance product for your needs.

*Savvy does not represent Defence Bank for its car loan product. All information in this article is correct as of 10 April 2024.

The features and benefits of Defence Bank car loans

Interest rates starting from 6.90% p.a.

By applying for a car loan with Defence Bank, you can access an annual rate from 6.90% p.a. (7.67% p.a. comparison rate) on your finance deal.

Buy new or used

You get to choose whether to purchase a new vehicle fresh out of the dealership or a used car up to five years of age at the time you buy it.

Choose your own repayment schedule

Whether you receive your income on a weekly, fortnightly or monthly basis, you can choose a repayment schedule to fit your needs and ensure you’re comfortable meeting them.

Borrow as little as $1,000

Defence Bank allows for car loans of any amount from just $1,000, giving you carte blanche to select any car you like provided it meets the eligibility criteria and you can afford it.

Repay over one to seven years

Another factor in making sure your repayments are manageable is selecting a repayment term which suits your needs, with shorter terms coming with larger repayments and vice versa.

Additional repayments available

You’re not required to rigidly stick to the minimum repayments set by Defence Bank; you can go above and beyond by making extra or larger repayments whenever you like.

The pros and cons of Defence Bank car loans


No early repayment fees

Without any penalties for paying out your loan early, you can benefit significantly from a shortened loan term, potentially saving hundreds in interest and fees overall.

Motorcycles available for purchase

You also aren't limited to cars when it comes to Defence Bank’s car loan product, as you’re also able to purchase a new or used motorcycle (up to five years old).

Fast and easy online applications

The approval process for your car loan application is a quick one, with the time taken between your initial application and owning your car only a matter of days.


Unsuitable for cars more than five years old

You won’t be able to purchase a used vehicle above five years of age and finance it with a car loan from Defence Bank, with its personal loan the only option at a minimum of 10.49% p.a. (11.45% p.a. comparison).

Ongoing fees

Although Defence Bank's application fee of $150 is waived for New and Used Car Loan products, you'll still need to pay $10 per month as part of your agreement.

Loans available to members only

You have to become a member to apply for your car loan, either prior to your application or as part of the process, which you don’t have much choice about.

More about Defence Bank car loans

How do I apply for a Defence Bank car loan?

Defence Bank is no different from many other lenders across Australia when it comes to their application processes. It’s fast and simple, with only a few steps along the way until you can be fully approved and funded for your Defence Bank new or used car loan. These are as follows:

Get pre-approval

Once you’ve worked out a rough idea of what you want out of your car loan, you can submit your initial application via Defence Bank’s website. This is more to tell your lender about you as a borrower and let them know more about the type of loan and car you’re looking for. It shouldn’t take long for you to be granted pre-approval, which will give you a clear idea of what you’re likely to be approved for.

Choose the car you’re after

With pre-approval in hand, you can head out and start looking for your car. It not only serves as an indication of the amount your lender is willing to approve you for at that point in time but also a clear limit for sellers to negotiate within. For example, if you approach a seller with a $30,000 pre-approval, they already know you won’t be capable of borrowing much beyond that and will have to adjust their price to get the deal done.

Apply for formal approval

After you’ve found your car and agreed to purchase it, you can go ahead and submit your final loan application. This will have all of the relevant documentation you need, particularly information on your car, and will be similarly easy to submit. Ensure you double and triple-check the application before applying, as you’ll want to avoid any potential mistakes.

Sign your loan contract and take ownership of your car

If Defence Bank is satisfied with your application, they’ll give you the green light to buy your car and send through a loan contract for you to sign. After this has been completed and returned, the funds will be released to your seller and you’ll be able to take ownership of your car.

What are the fees I’ll have to pay on my car loan?

There are various fees which you’re likely to come into contact with over your time repaying your car loan with Defence Bank. It’s important to be aware of these before you sign up, as they can make a significant difference to the amount you end up paying for your finance.

One of the fees you won’t have to pay is an application fee. This is typically charged for $150 on their personal loan products, but it isn’t payable for new and used car loans. This represents a notable saving on many other car loans whose lenders do enforce the establishment fee. The other fees payable on your loan include:

  • Service fee (monthly): $10
  • Security processing fee: $50
  • Security registration fee: $6
  • Loan variation fee: $50
  • Arrears reminder notice fee: $20 per letter
  • Default notice fee: $20

Frequently asked Defence Bank car loan questions

Does Defence Bank offer other types of car loans?

No – the car loan analysed here is the only option for secured car finance offered by Defence Bank. There are other loan products on offer which enable you to buy a car, but these aren’t vehicle specific. There’s a wide range of car loan types available in the market, so it’s important to compare your options with Savvy to help you find the best car loan deals and offers.

Can I access instant online approval?

No – instant online approval isn’t possible for car loans, as lenders require time to assess documentation in relation to your profile and, perhaps most importantly, the car itself. Because the car is serving as security, your lender needs to know whether it’s valuable enough to be sold to recoup any funds lost if you default.

Can I take out a car loan if I’ve never had a car loan before?

Yes – most car loan applicants are doing so for the first time, as they help get on top of the steep purchase price which may be difficult for younger borrowers. If you can show Defence Bank that you can comfortably afford to manage its repayments, you’re more likely to be approved. A credit history will significantly boost your chances of approval, such as credit card, store line of credit and utility bills all contributing to your score, so keeping on top of them will hold you in good stead for your application.

Are there any restrictions on the type of cars I can buy?

You can essentially purchase whatever car model you like, provided it fits Defence Bank’s criteria, such as those relating to age and condition. You can buy a Land Rover, Porsche, Jeep, Volvo, Renault or anything in between with your car loan.

Should I take out a car loan or a personal loan?

There are several factors to consider in the car loan vs. personal loan debate. Personal loans will cost you more in interest and fees as a general rule and are more restrictive when it comes to maximum loan amounts. However, the main benefit is that they can be used however you like, meaning you can purchase any car of any age and use any leftover funds for any other personal use. It’s important to weigh up your options carefully before you choose.

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