10 tips for getting the best car loan.
Is it time for a new car or caravan, but your savings don’t quite add up to the wheels you want?
Choosing a vehicle can be a time-consuming process, so it helps if the finance choices are easy.
Getting the best deal on a car loan, with no ongoing fees, pre-approval available and flexible terms, is the best way to get on the road sooner.
Before you sign on the dotted line, here are 10 tips for getting the best car loan.
1. Start a regular savings account
It’s a great idea to save some of the money you’ll need to buy a new car, so you don’t have to borrow the entire amount.
A good range for a car loan deposit is around 10 to 20%.
Contributing regularly to a savings account can also show your lender you’re financially responsible.
If your wages are paid into your account and you’re paying your bills, it can help them see you know how to manage a budget.
Most lenders will also check your credit history to see if you have other loans and if you pay your debts on time.
2. Get the best interest rate
Browsing for the lowest interest rate on a loan can save you serious dollars.
You may be surprised how much difference even a fraction of a per cent can make.
People’s Choice Discounted Personal Loan (Car Loan) for cars and caravans up to five years old offers competitive rates.
To compare personal loans, try this comparison tool.
3. Choose a loan with low fees
Don’t just look at the interest rate on a loan – compare other costs.
Entry fees, exit fees, early repayment fees, and monthly fees all add up.
With no monthly account fees, your repayments are going 100% towards your loan.
No fees on additional repayments or early payout also means you can pay off your loan sooner and enjoy your ride debt-free.
4. Get your paperwork in order
Paperwork might not be fun but, to drive away in your new car sooner, getting your documents ready can save you valuable time.
Here are some of the things you are likely to need:
a) Payslips, pension details, proof of rental income or any other paperwork that shows your income
b) Evidence of cash savings or the value of motor vehicles, property, furnishings and other assets
c) A list of expenses such as rent, mortgage and power bills
d) Details of any other loans you have, including credit cards
e) Identification, such as your driver’s licence
5. Find out how much you can borrow
A brand new, sporty, silver 4WD might be the car of your dreams. But would you be better off buying a less expensive model?
When you’re applying for a car loan, your lender will assess how much you can afford to repay and determine if the loan meets your needs before they can approve your application.
6. Check your repayments
To find out if your loan repayments will impact your lifestyle, find out how much they are likely to be.
Starting at this end of the equation can help you be more realistic about affordability.
7. Check you can make extra repayments
You could get a pay rise, save more money than you thought, or even come into a windfall. Paying more than the minimum is a great way to clear debt and reduce the amount you spend on interest.
But you’ll need to make sure your lender allows you to do this without penalties.
8. Choose a loan that lets you redraw
Imagine your car needs an expensive repair, or you suddenly have to move house or replace a major appliance.
It’s good to know that you can draw down on the extra repayments you have made on your personal loan if you are in a financially tight spot.
9. Get friendly advice
Banking should be easy. Choose a lender who offers friendly, accessible service and has your best interests at heart.
Ideally, they are 100% member-owned, which means they work with members to meet their financial needs and help them realise their dreams.
10. Hit the road
The hard work is done – you’ve registered your car, transferred the ownership and taken out insurance, right? Now it’s time to slide into the driver’s seat, start the engine, and get the show on the road.
To enquire about a People’s Choice Discounted Personal Loan (Car Loan) that has pre-approval valid for 90 days, call 13 11 82 or apply online.
This article is for information only and is not intended to constitute financial advice. Any views expressed are the views of People’s Choice Credit Union solely. This information must not be relied on as a substitute for financial planning, legal, tax or other professional advice.
People’s Choice Credit Union, a trading name of Australian Central Credit union ABN 11 087 651 125, Australian Financial Services Licence and Australian Credit Licence 244310. In this article, People’s Choice Credit Union is referred to as People’s Choice.