Get the Best Car Loan for Your Needs
Finding the best car loan for you is not always an easy task. This market is flooded with hundreds of good deals and offers which can make things very confusing.
When you are choosing the best car loan it is a good idea to break down your search into key areas. This will help you to compare loans more easily and find out which products really can offer you a good deal.
1. How much can you afford to repay each month?
This is one of the key considerations you need to make when taking out any kind of loan. It can be difficult managing all the various credit products and bills we have these days. You need to examine your finances carefully and see exactly how much you can comfortably afford to repay on your car:
– Look at your current incomings and outgoings.
– Make sure you include all of your bills, expenses and other credit product repayments.
– Check that you can set aside enough money each month to pay off a car loan.
– If your budget is very tight then it will be more important than ever to make sure you are getting a good deal in your loan interest rate.
2. Do you need to pay anything upfront?
Some of the best car loan options require you to make an upfront deposit payment. For example hire purchase deals require you to make a payment of around 10% of the cars total sale price. It is worth making payments upfront as this can mean you have lower monthly repayments afterwards.
However if you cannot afford to save up for a deposit then you may not be able to apply for certain loan products such as those sourced direct from the dealer. This should not be a problem though as there will be other good loan options available from other lenders that do not require deposits.
3. What are the overall repayments?
As well as looking at the monthly repayments you need to look at exactly how much you will need to repay on the loan overall. This is why interest rates are so important, as they tell you how much the lender will be charging you for borrowing money.
– The lower the interest rate the better in most cases. This will mean lower monthly repayments and also lower overall costs.
– However you do need to consider the length of the loan as well. If you take out a low interest loan over 5 years then it may actually work out to be more expensive than a high interest loan over 2 years. This is because although you are paying less interest each month, you are paying it for much longer.
Make sure you check exactly how much the loan will cost you in total so that you can compare different rates and lengths to find the best car loan deal overall.