Purchasing a car is one of the most important decisions of our lives. For most of us, we are unable to buy our dream car without the help of Car Finance. Taking on different amounts of debt when buying a car can be both confronting and challenging and with all the changes going on in the world, getting a car loan has become more difficult than ever.
Shop for Cars has put together 5 Tips for Getting A Car Loan in 2021
For Car buyers there is a variety of different lending options available to you - such as credit cards and credit cash advances. Car loans offer a cheaper alternative on repayments as opposed to the heavy interest rates other forms of finance provide.
Car buyers have two types of loans available when buying a car. Used Car Loans or New Car Loans. Both loans have very different terms, conditions and requirements so before you consider applying for a loan it is best that you determine what type of car you are looking to buy.
Related Article: Should you buy a New Car or Used Car?
The first area car finance providers look at is your credit history. Customers who present a high risk or have a history of missing repayments will likely have their application declined.
Customers looking for a car finance must understand the repayment amounts required prior to application. To increase your chances of getting a car loan we strongly recommend reducing your liabilities such as credit card debt.
A good credit history is essential for all car financing.
Reducing your loan repayments is a MUST. Car Buyers who are looking at getting a car loan must research and compare the different types of loans available in the Australian. Some loan options could potentially save you thousands in the long run.
If you are looking for car finance you need to have a reasonable deposit. Having a good deposit when applying for car loan gives lenders confidence that you can meet the repayments. The higher deposit you have for the car you want to buy, the less repayments you will need to pay.
Good ranges for a car loan deposit would be between 10 – 20%.
A common mistake many car buyers make is applying for a loan beyond their means. Car financers will not provide loans to customers who cannot meet the interest and weekly repayments for the car. For example, if you are a student with a minimal earning capacity and a small deposit you cannot request a significant loan for the brand-new Mercedes-Benz car.
Customers should research and understand the repayments required on the particular car they want to buy and if they have the earning capacity to meet the ongoing costs.
Related Article: What Car Should I Buy?
Budget your total expenditure and identify if you can make the loan repayments. You need to understand the amount you need to contribute to the loan along with other daily expenses such as food, electricity, water, and insurances. You should also budget for any change in interest rates.
Getting car financing has become more difficult than ever. As a potential car buyer, the best thing you can do is prepare yourself as best as you can. Check your credit history, shop around for the best loans, choose a vehicle within your means and understand how the loan repayments will affect your daily life.
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**Using these tips does not mean you are guaranteed a loan. The financing and lending company will evaluate your application and will provide feedback. An outcome will be provided once all aspects have been taken into consideration. **
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