I need a car to be able to get the kids to school and get a new job. I've just divorced my husband, and while I get some money each week, it's hard to save enough for a car out of that. I need to get a used car and a car loan to get us on our feet and start our new life. I don't really mind what a car looks like as long as it runs well. This blog is about getting loans for getting on with the rest of your life after a divorce and has tips for newly single mums.
For a good number of Australians, the only way purchasing a car would be financially feasible would be if they secure a car loan. However, the process of getting a loan should not be simplified into just applying and waiting for a positive response. With a wide assortment of lenders to choose from, you would be best advised to know what your individual needs are as well as how to keep your overall costs low. Read on for tips that would help potential car buyers get an affordable loan.
Choose a flexible loan structure
One of the assumptions people make about car loans is that if they are capable of paying their loan early, then they will be rewarded for this with lower interest rates. In reality, some lenders could penalize you for these early repayments, as they will lose money if you do not stick to the entire duration. Thus, you may find you have additional costs to pay for such as early exit fees, early repayment fees and more. When seeking a car loan, the first thing you should do is look for a lender that provides you with a flexible payment structure. A flexible structure would allow you to pay your loan at the pace that matches your financial capability, minimising the risk of you defaulting on your loan or having to pay additional costs.
Opt for a short loan duration
Long-term loans may be appealing to individuals on a tight budget as it gives them a sense of assurance they will be able to make small payments over an extended period. However, what you are not factoring in is that the longer you are paying off your car loan, the more interest it will be accruing. Therefore, you will end up paying much more money overall for the purchase of your vehicle than the actual worth of the car. When negotiating your loan offer, try your best to choose the shortest repayment period that you would be comfortable with to keep your interest costs low.
Do not focus exclusively on the monthly payment
Another assumption some newbie car buyers may have is that having cheap monthly payments translate automatically into a great loan. The reality is that several different negotiations go into the cost of your loan. Firstly, you should negotiate on the actual price of the car. Secondly, if you will be trading in a vehicle to secure your loan, you should factor in the value of the trade-in. Lastly, negotiate on the overall amount of money that the loan will cost, including the interests and compare this to the actual cost of the vehicle. By exclusively focusing on the monthly payment, you will not have the full picture on what value is being placed on the car.
Share30 October 2017
