August 15, 2016
If you're shopping for a new car, there is great opportunity for you to score yourself competitive deal as we come off the front of the new financial year.
Most of us require a loan to purchase a new car, and while a lot of people will simply choose a loan from a car dealership, it’s good you know your options are not limited to this.
Like any loan, it’s important to look at more than just the interest rate. While interest rates will play a big role in your final decision, it’s not the only factor you should consider.
Here are some important questions to keep in mind when selecting your car loan:
Is the rate fixed or variable? If you are looking for certainty around the repayments of your car loan, it’s worth considering a fixed rate. While fixed rate products do provide security in terms of your interest rate, they can lack other features such as repayment flexibility. Some lenders will restrict your ability to prepay a loan, where others may not – as always, it’s essential that you read the fine print before making your final choice.
Are there loan fees? As a borrower, there are many kinds of car loan fees that you are subject to. These include establishment fees, loan service fees, late payment fees, and potentially even prepayment fees. Our brokers here at Mortgage Choice Woolloomooloo can provide you with an overview of multiple loans and their fee structures from over 25 lenders, to guide you into the best product for your financial needs.
What is the repayment structure? Instead of focusing on low interest rates, it’s crucial you are comfortable with the cost and frequency of the repayments for your car loan. Remember, you must consider all elements of the loan, aside from just the interest rate. It’s also good to know that you can choose the frequency of your repayments, whether they are weekly, fortnightly or monthly.
How long is the loan term? It’s important to consider the length of your car loan, as this will determine the amount of interest you pay over the lifetime of your loan. Generally speaking, car loans may last between 12 months to 7 years, so pick something that best suits your financial circumstances. You will pay less interest on a shorter term loan, but the repayments will be higher. Ensure you can afford the loan comfortably in your situation.
Don't wait until you've found your car - we can help you secure pre-approval for your car loan, so that you can feel secure shopping for your new car knowing you have the finance ready to go. Contact us for more information.