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BlogThings to Know Before Getting Car Finance

Things to Know Before Getting Car Finance

So, you’ve finally got your driving license and want to treat yourself to a nice car? Maybe, your old car no longer serves your needs and you’re looking for a decent upgrade? No matter the reason, you definitely want to get the best deal without going broke. If you have enough money to purchase the car of your dreams, you may consider yourself lucky. You can grab the keys and start testing your purchase on the roads of your city. Still, if you don’t have money to pay upfront, you can rely on some financing options that may help you become a happy owner of a new car faster.

Car loans

It’s a rare person who can afford to pay all at once for their new vehicle. And purchasing a car on finance makes it possible to spread the whole amount over a more manageable period. Depending on your current financial situation and down payment, you can choose the repayment terms you’re most comfortable with and pay off your loan monthly.

The good news is that today you don’t need to physically visit financing companies and submit the required paperwork in person. You can enjoy more flexibility and convenience offered by online car finance. You can quickly finance the vehicle you’ve got your eye on and own it outright. And you don’t even need to leave your home for that!

If you choose your lender wisely, chances are you won’t encounter any difficulties. Just make sure to stick to your payment schedule and allocate your money accordingly. With this in mind, loan only as much as you know you can afford to pay back.

There are a lot of other things you need to know to get the best lending terms. So, go on reading.

Explore the available options

As it has been noted, it is easier than ever before to get a car loan. If you’re on the lookout for a reliable, no-strings-attached car financing option, consider getting a car loan from a credit union, bank, or any other authorized financing company. Not only is it convenient but also safe and not heavy on your wallet.

If you want to get the best offer, you should definitely shop around. Invest some time in comparing payment terms and interest rates from local lenders to figure out what suits your needs. Don’t forget about online loans, which can save you a lot of time and effort. Just make sure to get the necessary information on financial planning, lending terms, and criteria, and help you process your application within the shortest time frame.

Banks. Banks have long been the first go-tos of people eager to finance their new or used cars. The majority of big banks offer fast car loans to their clients and even have handy loan calculators on their websites to help them figure out the ballpark amount they might need to pay. Previously, you would need to call your bank and apply for the loan in person. But today, you can do this online, provided your loan size doesn’t exceed a specified limit.

Credit Unions and Loan Platforms. Similarly to banks, these institutions make loans, accept deposits, and help their customers perform other financial operations. Still, in the majority of cases, they do this faster and offer more convenient options to their clients. Loan platforms that specialize in lending can quickly match you up with the right loan provider so that you can borrow the required sum in the blink of an eye.

Normally, credit unions and loan platforms offer loans at lower interest rates, which makes them more popular car finance options.

Car Dealers. Car dealerships may also help you finance the vehicle – new or second-hand – if you get it from them. If you’re looking at this option, be sure to weigh up all the pros and cons carefully. Most of the time, car dealers offer higher interest rates and less pleasant lending terms.

The size of the Loan

If you’re eligible for a big loan, it doesn’t necessarily mean you should get one. You don’t want to be overburdened with hefty monthly payments, so the best bet would be to go for the loan size you’re most comfortable paying back. You also would be well-advised to factor in maintenance-related expenses, insurance costs, fuel, MOT tests, etc. before deciding on your loan size.

Repayment period

It’s up to you to choose the repayment period. But before you agree on a period, you want to review your current situation and try to make some tentative prognoses regarding your future paying capacity. If your loan doesn’t exceed €30,000, you may want to spread your payment over no more than 3 years. In some cases, you may need to go for a 5-6-year period, though. It’s also good to know that today a lot of banks don’t impose any penalties for extra repayments or paying off the loan in full.

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