Cheap car loans considerations.The downside for many people when buying a new or used car is how they are going to pay for it. Usually this means obtaining finance by way of a personal loan or hire purchase through the dealer. Whichever option you choose you usually have to pay interest.
The downside for many people when buying a new or used car is how they are going to pay for it. Usually this means obtaining finance by way of a personal loan or hire purchase through the dealer. Whichever option you choose you usually have to pay interest. Interest of course boosts up the cost of the purchase so how you do you ensure you get a suitable deal and what could be classed as ‘cheap’ car loans?
Your credit rating - One of the first things that has an effect on how much interest you need to pay, (and therefore which affects how much you have to pay for the vehicle) is your credit file. This is looked at by potential lenders who use it to assess your credit worthiness. If you have a perfect credit score then you may be able to get a realistically priced interest rate deal. When being offered a loan, always check what the rate is, you may have to pay above the average. If your credit rating is poor, the interest rates will reflect this and you may even have to consider applying for a bad car credit loan.
Beware of added fees – If you take a loan out over a period of time that has a reduced rate of interest during that time, you may be planning to pay off your loan earlier than anticipated to avoid jumping to a higher rate of interest. However when considering this you may want to check that you do not have to pay a one off early redemption fee in the event you settle the loan early. If you do this of course it adds to the cost of the vehicle.
What type of finance? –You may want to go to a specialist website that searches and finds you suitable deals, which may save you time and money.
How long you take the loan over – How much you pay for your loan is based on how long you take the borrowing over. You are typically able to keep down the monthly repayments if you were to spread out the loan over a longer period. The downside to this is that in the end the vehicle typically costs more as you pay more out in interest.
How much deposit you put down – How much you put down as a deposit may goes towards getting cheap car loans. If you can put some savings towards the vehicle, you borrow less so you may make savings on paying interest.
Posted by Edwin Miles on