Getting a car loan may appear to be quite a relatively easy thing to do. The automotive finance market is extensive with many lenders advertising heavily and vying for business. But how to get a car loan that is cheaper and within your budget requires a suitable lender, loan structure and can be assisted with expert finance broker services.
The pressure is on both businesses and households to keep their expenses within budget in the face of rising prices and inflation. The RBA has acted again in July to raise interest rates which means the interest rates on car loans will also increase. A higher rate can mean higher monthly repayments. So getting the cheapest interest rate can represent a real saving and ease pressure on monthly budgets.
When sourcing car loans there are a number of sources and approaches which can be taken. Online services in general terms are great for enabling individuals to handle many aspects of life directly themselves. But when it comes to a major move such as how to get a car loan, engaging with a finance broker can make the process easier and result in a cheaper, more affordable loan.
As specialists in car finance, we share our hints for getting a car loan within budget.
Establishing the Affordability Zone
Getting a car loan within budget starts with establishing the budget. You could call that the affordability zone. Arriving at a figure that can be comfortably managed on an ongoing monthly basis over the full term of the loan. In basic terms - the car loan repayments must be affordable.
This process can be part of pre-loan preparation as it can speed up the loan process if you are ready to brief your Jade Car Loan consultant with your precise preferences and requirements. It can also be extremely helpful when it comes to deciding exactly which car you can afford to purchase.
Achieving the magic number – that affordable repayments amount, can be approached in a number of ways:-
- Getting the cheapest car loan interest rate.
- Buying a lower-priced car. Not necessarily used rather than new because interest rates and loan conditions can be different for used and new cars.
- Getting the right car loan term.
Using a business car repayment calculator can greatly assist in this process. It allows you to play with different configurations of car prices, loan terms and interest rates to find the ideal combination that is within the affordability zone.
Balancing personal budgets is a very individual process which may be assisted with the support of a financial advisor. Financial advisors provide different services from our role as a motor vehicle finance broker. Our role is to source the finance not advise individuals in regard to personal financial matters. But consumer finance is regulated through ASIC and we abide by the Responsible Lender Guidelines. Key to these guidelines is that individuals must not be offered a loan which is not suitable for them.
Decisions can be made around deposits in order to reduce the loan amount which in turn may bring the repayments into the affordability zone. Making a down payment rather than including the full purchase price in the car loan can be considered.
Achieving Cheapest Car Loan Interest Rate Offer
The cheapest car loan interest rate is key to the cheapest car loan and lowest repayments and the end goal of getting a loan within budget. To achieve the cheapest rate, there are two main factors to consider – choice of lender and credit profile.
Interest rates on car loans will vary across the lender market as can be seen in our comparison guide. This is due to a number of factors including where the lender sources they own funds, the price lenders pay on their own funds, lender costs and expenses, individual lending guidelines and their interest in being competitive in key markets.
Loan applicants can either do all the hard work of submitting applications to quite a few lenders in order to get quotes to compare or they can simply use our services. We’re accredited with multiple banks and non-bank lenders. Our consultants have access to the knowledge around which lender will best suit the applicant and which are offering the best rates at that particular time.
The other aspect to consider is the individual credit profile. The cheapest interest rates are typically offered to applicants with a good credit rating. Reducing debt levels and ensuring the credit score is as high as possible is critical to being offered the cheapest rated loan.
To ensure the car loan is within budget aim at achieving the cheapest interest rate by engaging the assistance of our broker-style services.
Arriving at the Ideal Car Loan Term
Getting a car loan within budget usually means a monthly repayment amount which works with other monthly expenses. The interest rate, loan amount and the loan term determine the repayment amount.
The longer the car loan term the lower the monthly repayment. But keep in mind, the longer the term the more interest in total will be payable.
Deciding the car loan term is not always up to the applicant. Lenders will have their own guidelines around this aspect and their offers will include an assessment of the applicant’s credit history. Using our services can assist as our consultants handle negotiations to achieve the most suitable and achievable loan terms.
Another issue to consider is how long you plan to keep the car. Ensuring those intentions are in line with the loan term can result in avoiding all payout fees.
These are all simple steps that can be followed to get a car loan within budget and can be supported with our services.
Contact Jade Car Loans 1300 000 003 for assist in how to get a car loan within budget.
DISCLAIMER: IN REGARD TO MISREPRESENTATIONS AND ERRORS CONTAINED IN THE MATERIAL AS PRESENTED, LIABILITY IS NOT ACCEPTED. THE DETAILS AND CONTENT IS PROVIDED FOR CAR BUYERS AND INDIVIDUALS AND BUSINESS SEEKING FINANCE PURELY AS GENERAL INFORMATION. THIS IS NOT PROVIDED AS THE ONLY SOURCE OF FINANCIAL INFORMATION. ANYONE THAT CONSIDERS THAT NEED FINANCIAL ADVICE ABOUT THEIR SPECIFIC REQUIREMENTS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.