How to choose the best car loan?
A car loan is a common and simple solution for most people who are buying a new or used car. But before you choose your car loan and sign the dotted line, make sure you have shopped around and investigated the other options available to you to ensure that you have found the best deal available.
RateCity has great consumer car loan tools such as the car loan guide and the car loan calculator. The handy tools can help you find some of the best deals and makes it easy to compare car loans online.
Make sure that you don't rush into a decision and that you have considered these points which can save you on your repayments:
- Interest rates – Your initial and probably final decision will be based on what the interest rate is. You are able to choose from a variable rate or fixed. If you are intending to pay off your debt as soon as possible or would like to make additional repayments a variable rate could be the best thing for you. Having a fixed rate allows you to budget and means that your rate will be safe from any Reserve Bank rate rises that may occur.
- Secured or unsecured – You will need to choose between a secured or unsecured loan. Price can creep up on you in this area. If a loan is secured this means that it will be tied to an asset, which can be repossessed if you fail to make your repayments. Unsecured loans are collateral free and therefore tend to have higher interest rates.
- Hidden fees and charges – Read your product disclosure statement (PDS) and make sure there are no added fees that you're unaware of. This could include establishment fees, early repayment fees, annual fees or extra charges if you miss your payments.