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Aside from your home, your car is probably one of the biggest purchases you will ever make. With this in mind, it’s important to ensure that you’re getting the best possible deal on your loan as getting it right could save you thousands of dollars.
While trying to find the ideal car loan can be daunting, the good news is that the Rising Tide lending team has recently added brokering car loans to their bag of tricks! They’ve put together a list of the things you need to look out for below:
Be aware of the monthly repayment amount and make sure it fits with your budget
Like with anything you agree to pay on a monthly basis, it’s important that you are realistic about what you are able to pay every month on your car.
Ask for breakdown of all fees & premiums
Sometimes lenders can be a bit sneaky about extra fees and charges associated with a car loan, so it’s important to ask for a detailed, written breakdown of ALL costs associated with your car loan (or any loan for that matter).
What is the loan term?
Think carefully about your loan term and any other financial commitments that are likely to pop up during that time. You may be able to afford the repayments now, but what about in five years time? Perhaps you and your partner are thinking of having kids so you might be running off a single income for a period of time. It’s important to take these things in to account.
Is there a balloon after the loan term?
Sometimes car loans are structured to include a balloon repayment at the end of the loan term. This means that a large, lump sum payment is due at the end of the loan term in order to keep monthly repayments down. This structure can suit some people perfectly but can spell danger if you, the borrower are’t prepared for it.
Is the interest rate fixed or variable?
A loan with a variable interest rate means your repayments can change. Getting a loan with a fixed rate can make budgeting much easier so it is important to consider this element of your loan very carefully.
Check whether you can make extra repayments without being financially penalised
Some lenders will charge you a penalty if you make extra repayments or if you pay off the loan early. If you intend on doing this, it’s important to find a lender that doesn’t charge such fees.
Not sure about all of the above or don’t have the time to tackle it on your own? Come and have a chat to us. Send us an email on firstname.lastname@example.org to book an appointment.