Do You Know These 5 Helpful Tips For Getting The Right Auto Loan?
Buying a car is one of the biggest expenses of your financial plan. Of course, a car is an expensive purchase and not everyone can save that much in one go. The good news is that you can now buy a car, thanks to the various auto loan services offered by a number of financial institutions.These auto loan services offer a variety of payment schedules to suit your needs.
However, there are so many kinds of car loans available that one might feel overwhelmed. So we’ve come up with some insightful tips on how you should choose an auto loan to buy your dream car. Here they are:
1. Make Use Of Online ToolsThere are websites such as RateCity that feature amazing car loan tools, which don’t cost a penny. You can use the Car Loan Guide and the Car Loan Calculator in order to enter the information you have gotten about each car loan you are considering. Another tool can be Bankrate’s auto calculator.
These can be extremely useful in finding out which is the best deal of the lot. Comparing your available car loans would make it easy to choose between them, or at least shortlist two or three.
Online banks are also generally more competitive than regular ones. They offer lower interest rates and are more cooperative in customizing a loan according to your needs. Consider this option before going to a large, famous bank for your car loan.
2. Consider Interest RatesThis is where your decision can turn; the interest rate is probably the main factor that you would consider while choosing a car loan. The interest rate can be variable or fixed. If you want to pay the debt off as soon as you can, or intend to pay as much as possible each month instead of a fixed payment, the variable interest rate would be a better choice.
On the other hand, if you have to adhere to a strict budget for the next year or so, go for a fixed rate. This would allow you to work the payments into your budget. Thus, you would not have to worry about the payments increasing due to the reserve bank rates. The car payment would be just another fixed expense.
3. Secured Or Unsecured?This is another decision to be made; should you take a secured or unsecured loan? If your loan is secured, it means you would have to provide some sort of collateral. This would result in a lower interest rate but could risk your item being repossessed if you fail to make payments.
An unsecured loan would mean no risk of collateral but would present higher interest rates. You would have to assess your situation and decide what your need more: lower interest rates or your possessions safe with you.
4. Be Aware Of Hidden ChargesYou would be provided a Product Disclosure Statement (PDS) when you are asking about a specific car loan. You should read this very carefully and make certain that there are no hidden charges or fees. Talk to an expert if you’re not sure what a certain clause means, or clear it with the place you’re taking the loan from.
Be on the lookout for early repayment fees, missed payment fees, annual fees, or establishment fees. If there are any, work them into your budget and see if the car loan is such a good deal as it seemed at first. If the extra payments are not doable, then this car loan is not for you.
5. Consider TheWhole PriceEspecially for first-time car buyers, it is very easy to get swept away by the prospect of low monthly payments. However, keep in mind that with interest rates, the longer the payment period, the more extra money you have to shell out.
Some car payments may even take as long as 96 months. Very few people can say that they are actually secure enough to make even a small payment for that amount of time. Your car itself won’t be in very good condition by the time you’re done paying that loan provided it hasn’t already gone through a few breakdown, repairs, and minor accidents.
Hence, you should work with the whole price of the car and calculate exactly how much you would have to pay over the next few years.