When it comes to applying for the approval of a car loan, The Smarter Finance Company is the expert at helping you get things done quickly, smoothly and with the least amount of stress! But it’s important for you to find out a little bit about how things work on your own so that you know what you’re getting into! Whether you intend to work out applications on your own or you are going to a broker (like us) for help, here are some basics that you should know about!

Payments – THE biggest components of your car financing plan is your monthly repayment amount! Depending on how big the amount is, it can make the difference between a few years and a decade of instalments to the bank! That being said, it’s important to work out how much money you are able to afford every month so that you can safely put aside that amount without your lifestyle and other commitments being affected by this new purchase.

Interest Rates and Fees – After the monthly payment amounts, you need to consider the interest rate of the financing plan! The interest rates can be floating/variable or fixed depending on how your financing plan is structured. Most of our clients prefer a fixed interest rate throughout the tenure of their car loan so that they can accurately set aside the amount that’s required for the monthly payments. Fees due to the broker, agent or the bank are normally included inside this quoted interest rate as the “cost of borrowing money” from the financial institution. Sometimes the fees can be and additional percentage on top of the interest rate so make sure that the figures are clear so that you know where your money is going.

Options – There are a lot of other options which come with your car financing plan so that you can structure it exactly to your liking. Using Novated Leases or Hire Purchase agreements, deciding between secured and unsecured options and even the future refinancing and balloon payments can make your monthly payments more easy to manage or give you other alternatives to paying from your pocket. For example, you can get tax rebates and use your income (in the case of novated loans) to fund your financing plan.

What Happens if you Can’t meet the Obligations – Nobody wants to consider this possibility, but unfortunately, it DOES happen! There are things you can do to ensure that you are covered against involuntarily being able to make payments – such as insurance that covers death or disability or the person who has signed the contract, or even insurance against being retrenched. Otherwise, it’s important to work out an instalment amount that you’ll be able to handle if you don’t want to worry about what might happen if the bank comes knocking on your door!

Phew! And when it comes to negotiating and comparing all the different quotes that come in, that list isn’t exhaustive either! If you are keen to find out how you can make your financing plan work for you, instead of being a slave to your monthly payments, drop us an email and let The Smarter Finance Company help you out!