Things to Look at Before Accepting a Car Loan

Been approved for Car Finance? Receiving approval from a lender is an exciting experience! However, there are a few things you need to do before you put pen to paper and receive the funds to buy your new car. By doing a few small things, you could save thousands each year in repayments!

Here are 4 Things Car Buyers need to look at before accepting a car loan.

1. Interest Rate

The first thing you need to do before you accept a lenders deal is check the interest rate options. Different lenders offer, different interest rates and lending options for customers. Many options will look similar on paper, but when you dig a little deeper some may have added incentives that could save you thousands more than others.

It is important you speak to your chosen lender about their interest rates set up. Ask them what happens when and if there is a rate rise. Discuss the different options they may have available. Some lenders may fix their interest rate for a period of time whereas others may have a completely variable option which means your rate changes with the cash rate.

This is where it is so important to read the fine details. Learn the ins and outs of the different lending options and assess what is right for you and your lifestyle. Before you accept a deal, it is recommended that you consult with all relevant parties and seek expert advice.

2. Terms and Conditions

This is a big one! Many of us just scroll past the terms and conditions with most of the things we buy, however when it comes to car finance, it is so important that you read and understand every term and condition presented.

Similar to interest rates, some lenders offer completely different terms and conditions. The terms and conditions will tell you key information such as what will happen if there are rate rises, late penalties, the length of the loan and so on. All lenders have different terms and conditions, so it is important that you understand everything written before you sign any contract.

3. Refinance Options

One of the best things about the Australian Automotive Industry is there is an abundance of lenders available. One of the best ways that car buyers save money is by refinancing their loan.

Refinance is when you change from one provider to another to get a better interest rate. Before you accept a car loan it is important that you check your providers refinance conditions. Some lenders charge large fees for refinance. So, even though they may initially offer a good rate, if you ever want to change in the future, it may cost you big time.

Refinance options is one of the key areas you should check before you approve a loan from a lender.

4. Car Loan Length

Another important thing to consider is the total length of your loan. Most Car loans span from two up to seven years. Before you accept a loan, it is important that you understand the length of the loan and any conditions.

You need to ask your lender what happens if you want to pay the loan off earlier and any of the consequences that it comes with. The ultimate goal is to pay of the loan as quick as possible. The faster you pay, the less you pay, it’s that simple.

5. Ask about Late Payments

We can’t understate this point enough. It is super important that you ask a lender about late payments. Every lender is different than the other and with so many terms and conditions, you need to be aware of the consequences of paying late.

Obviously, your goal is to pay on time, every time, but unplanned things do happen which could result in late payments. When this happens, some lenders may charge astronomical fines/penalties. For this reason, it is important that you speak to the lender and understand their current set up before you accept the deal.

Final Word,

Being approved for a loan is an exciting experience, however it isn’t the end of the process. Before you accept the loan, it is important that you understand everything you are agreeing too. By doing that little bit more investigating you could save thousands in the long run. The 5 tips mentioned above are a few things you need to look at before accepting a car loan.

We hope you enjoyed reading this article. To read more articles like this, please visit the Shop for Cars latest news page here.

About Shop for Cars

Shop for Cars is Australia’s first dealership only car classified offering car buyers’ access to over 12,000 new and used cars for sale from Motor Dealerships only.

Shop for Cars offers car buyers the unique opportunity of applying for finance directly on the car listing that they are interested in. What makes this so exciting is car buyers can scroll through different finance options from over 60 lenders and choose the cheapest and best option that is right for them – removing the need to shop around or use a broker.

To learn more about Finance in Shop for Cars click here.

DISCLAIMER: This is all based on opinion please research and consult with all relevant parties to make the best buying decision.