Whether you are looking for a loan to buy a new car or you are looking to refinance your current loan, finding the perfect car loan is simply a matter of asking the right questions and looking in the right places. Find out the best way to find the perfect car loan by following these easy steps.
Decide how much you need to borrow
Think about which car you want to buy, whether you want to buy new or used, and what extras you need. Compare options at dealerships and from private sellers, and work out how much you can expect to pay for the car you are looking to buy.
Decide how much you can afford
How much you need to borrow and how much you can afford to borrow may not be in the same ball park. Create a budget to work out how much you can afford to pay back on your loan each month, and work out how long you will need to pay off the loan.
If you cannot afford a loan for the car you want, rethink your options. It’s not a good idea to take on a loan you can’t afford. You may end up defaulting on the loan, paying late payment fees, and perhaps even losing the car.
Compare car loan options
Once you’ve decided how much you need and how much you can afford to borrow, it’s time to compare car loan options. There are numerous car loan providers out there, all offering different options at different costs. Whether you are looking for used or new car loans, or refinancing for your current loan, compare all your options to make sure you get the best deal.
· Interest: Try to choose the loan with the lowest interest over the shortest period of time. Think about how much you will pay in interest overall. Think about whether you want a loan with a fixed rate or variable rate of interest.
· Fees: Check how much you will be expected to pay in fees, and add that to the overall cost of the loan to make sure you are getting the best deal.
· Features: There are various loan features to think about, for example, if you may pay the loan off early, make sure the loan allows for that.
· Loan term: Choose a loan term that has an affordable repayment schedule. Be aware that you may pay more interest overall on a loan borrowed over a longer period of time.
· Secured or unsecured: Loans secured against the car may be easier to get approved for, and may offer cheaper interest rates.
· Refinance: If you are looking to refinance your current loan, find a lender that offers this option, and make sure the new loan offers all the features you need, and gives you a great deal.
Use a car loan calculator
For a simple way to compare car loan options, use a car loan calculator. This can allow you to compare interest and loan affordability, and can make it much easier to find the best deal on your car loan.