|December 9, 2016||0|
Finding the perfect new car can be hard. It has to be the right brand, have the right features and of course the right look.
While it pays to be picky when choosing your car, the same is true when it comes to car loans. Getting stuck in a car loan with high interest rates or fees can continue to have bad financial repercussions long after the excitement of owning a new car has worn off.
The best way to avoid an impulse car loan decision, that will leave you paying through the nose, is to do some research on the right loan for you.
Knowing what is considered a good interest rate in the market is essential to being able to compare the loans on offer against a bench mark. Currently the lowest loans are under five per cent but are only available to customers who are securing their loan against an asset. This asset is usually the car that is being purchased.
Securing your loan is the best way to get access to the lowest interest rates and for added security you can fix your interest rate so that you can plan your repayments going forward.
Once you have found a loan with a competitive interest rate it is important to look at the fees that will be charged on a once off and ongoing basis. From establishment fees to account keeping fees and early termination fees, you might find that what initially seemed like a great deal will end up costing a fair bit more over time.
An important fee, that is often over looked by those taking out car loans, is the residual fee or ‘balloon payment’ charged at the end of the loan term. The residual fee is a lump sum payment, that you can opt to include as part of your loan, which keeps monthly repayments down but has to be paid at the end of the loan before the car is completely owned by you. Before signing up for a loan with a residual payment consider how you will pay the amount when the time comes and budget it into your savings plans.
This article is sponsored by I Love Loans. For more information on our extensive range of car loans, including secured and bad credit car loans, visit: http://www.iloveloans.com.au/car-loans/