If you are planning to buy your new car then you might find yourself in need of some car loan. Yes, unless you’re on some highly paid job you’ll find it hard to get all the finances for getting a car of your own. Your only resort in such a scenario would be car loan and nothing else. But what should you consider before finalizing on a particular loan. Here are some tips that will help you to end up with the best possible car loan for yourself.
- Know the type of loan
One of the very first decisions that you will have to make when considering the financing options for buying your own car is to know whether you should get car finance offered by a dealer or you should opt for personal loan. Though it can be easy with the dealer financing but this option can cost more compared to the normal car loans that the banks have to offer. The rates can be higher and you may end up paying extra fees. Dealer financing can be less flexible at times normally you are not the owner of the car immediately after your finance term ends. As far as the banks are concerned, rates can be compared fairly easily. Most of the bank websites offer loan calculators for doing this job.
- Know what is desired
As far as the flexibility and fees is concerned, think about what is desired. How quickly will you be paying it off? This will determine car loan’s term for you. For this, you should match repayments with the salary cycle you have. Will you be making any extra payments occasionally? If that’s the case then whether or not it’s possible for you to redraw some money in order to make improvements to your vehicle. Find out if doing so will incur any extra fees.
- Know what’s affordable
Before setting out in search of a car, it is important to find out what’s affordable for you and what amount will you be expecting to repay every month in terms of your car loan. The costs should include everything for owning as well as running the car. Factor in the registration fees that has to be paid annually, roadside assistance, insurance, petrol, maintenance, and repairs. Furthermore, the car type that you choose to buy will determine the amount that is needed as well as what repayment plan you should opt for.