Five ways to find the best car loan
May 19, 2011
If you're looking to buy a car, brand-new or second-hand, choosing the best way to pay for it could save you hundreds of dollars or more. But with over 140 car loans and more than 180 personal loans listed on RateCity, how do you know which option is the right one for you?
By doing your research and understanding your needs you'll be able to narrow your search criteria, find a car loan specific to your situation and accelerate the approval process. Here are our top tips to help you streamline your search and save money on your new vehicle:
1. Start with a clean slate
Reducing any existing debts (other than a mortgage), such as credit cards or personal loans will increase your borrowing capacity and make it easier for you to focus on repaying your new car loan.
If you don't have any debt, then that's great news, but not always in the minds of lenders. They'll want to see evidence that you'll be able to repay the money they lend you. A good way to get around this to show a record of regular savings or bill payments made on time.
2. Security can lower costs
A secured car loan is one where the lender holds security over a particular asset (in this case your car) until you have paid off the loan. If you fail to make repayments, or default, then the lender of the secured car loan has the right to repossess the secured asset and sell it to recover the outstanding balance.
These types of loans often have lower rates of interest than the unsecured alternative, because there is less risk involved for the lender.
3. Paper trail
There is no such thing as providing too much information when it comes to applying for a car loan. Even if you have supplied all of the required paperwork, there's a chance that your lender will request more.
Having all of the necessary details at hand will help to speed up the approval process. Gather identification, contact details, bank statements, credit history records, proof of income and details of the car.
Finding the best loan to suit your needs can mean hundreds of dollars saved over time. So before you sign up for a loan determine which loan type suits your spending and saving habits, the amount you can realistically afford, the features that you most need, and be aware of fees, charges, rates and conditions attached to the loan.
5. Nab a bargain online
Finally, the best way to find a great deal on a product that suits your situation is to compare car loans online. RateCity has complied some of the best car loans from a range of providers, which you can compare side-by-side. If you're not ready to buy and still have unanswered questions, then RateCity can also be a great resource with its many news articles, definitions and Car Loans Guide packed full of information.
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