All of those figures and rates floating around may not make much sense to you yet, but here’s how you can make some head and tail out of it with a little help from The Smarter Finance Company! There are a lot of things that make up your car financing plan, but we highlight some of the major points that affect your plan here.
First thing about financing your car, is working out how much you can afford every month. Because a car is a commitment, it’s important to take a good look at exactly how much is a comfortable amount for you to be putting aside for it. There needs to be a good balance between how much you have left over after making payments so that you are able to meet your obligations every month and yet are not struggling to meet your payments. Of course, being able to put a little bit more towards the monthly installments means you’ll be able to afford a higher tier of cars! Don’t forget to include your fees and taxes, petrol, insurance, maintenance and even the potential repair costs of owning the car too!
Interest Rates and Fees
It’s unfortunate, but the advertised cost price of your car isn’t all you’re paying for when you take up a car financing plan. Fees are applicable for processing and penalties of non- or late payments. Also, lenders charge interest for the loan of money, and what rate the interest rate is at can affect how much you are REALLY paying in the long run. Just remember to do your sums! Look at your deposits, balloon payments and loan terms and calculate the full price that you’ll be paying so that you know just how much you are putting down on that new car. As a general rule of thumb, shorter loan tenures and larger down payments mean you pay less at final count.
When applying for a car financing plan, lenders will look at your personal and credit history to determine what kind of borrower you’re going to be. Depending on what information come up, it will determine your interest rate and also whether approval of the loan will go through. It may be a good idea to have some of this information at hand so you can get a better understanding of how your loan may be affected:-
- Your Credit Score
- Previous and current addresses
- Employment and income history
- Declaration of (any other) income
- Declaration of any other Assets and Loans
When you have thought about these points, you are more or less ready to start shopping around for quotes. Take your time to research the different companies and perhaps wait for a promotion on loans to come up so that you can get a better car financing rate too. And when in doubt, you can always come to The Smarter Finance Company for a little extra information and assistance for your car financing applications too!