A car loan is a common solution for people who wish to buy a car, but are short on budget. Whether you are considering a brand new ride, or a used vehicle, finding the right car finance for your needs is very important. However, with the many types of car loans and financiers available, finding the right car finance can be a daunting task. If you are not careful, you will end up spending a lot of money on loan repayments.
When considering the many car finance options, you should always keep your financial needs and capacities in mind. This is because what works for your friend may not work for you. Here are 4 tips to lessen your confusion when shopping for the right car finance…
1. Set a Budget
Before you start looking for a car loan, you need to know how much you can afford to borrow and pay back monthly. Consider your monthly expenses and subtract them from your net salary. Whatever remains is the maximum you can afford as a monthly loan repayment. In saying that, you do not want to spend all your money on loan repayments! Make a wise decision and settle on a budget that you can handle without financial strain. You can always use loan calculators to work out loan repayments on different cars.
2. Type of Car Loan
When seeking vehicle financing, you will find there are secured and unsecured car finance options. A secured loan is one where your vehicle is used as security for the loan. That means if you default your loan, the finance provider can repossess your car legally to recover their money. On the other hand, unsecured car finance is where you do not use any of your assets to secure the loan. While both options can work in your favour, remember that unsecured loans have high-interest rates compared to secured loans. Make a wise decision.
3. Fixed or Variable Rate
When choosing car finance, you either go for a fixed or variable rate. With a fixed-rate car loan, your interest rate is fixed for the entire loan term. If you go for this option, check whether there are early termination fees if you repay your loan earlier than agreed. The variable interest rate is the best if you wish to repay your loan faster than the agreed timeline. It attracts no penalty fees if you repay the loan earlier.
4. Compare Loan Features
When shopping for car finance, you will realise there are many car loan providers. Therefore, you need to compare quotes from different providers and choose what works for you. When comparing quotes, consider these loan features and choose what best works for you…
- Can you make extra payments without attracting a penalty?
- What are the interest rates?
- Can you repay your loan early without extra costs?
- Can you choose your desired repayment period?
- Are there any hidden costs, for instance, loan processing fees?
- What is the wait time before the loan is approved?
Every car finance company has different loan features and terms, and this is why you should compare quotes from different companies. One company that you should check out is http://www.i3.finance/. They offer very competitive loans.