Purchasing a car may be one of the biggest investments you will make in your lifetime, aside from owning your own home or starting your own business. Your car can take you from point A to point B, both in a literal and figurative sense. And if used wisely, you can even use it as a means to generate a separate stream of income. There are so many opportunities to be had when you purchase a car, but how do you go about buying one in the first place? The answer is simple: car finance loans.
Through car finance loans, you can purchase a car without blowing out your entire cash reserve. It is also a smarter way to make major purchases without having to wait until you have completely saved up. This opens up so many opportunities for you to save or invest your resources for other things.
On the surface, car loans may seem pretty straightforward – a lender presents you with a deal, all the details of your monthly payments are listed and all you have to do is sign the dotted line. The reality is far from this misconstrued process of a loan application. That is why here, we have prepared a list of tips that you can follow to ensure that you are choosing the right car loan deal.
Tip #1: Know More About Credit Scores
Different lenders all have their own set of criteria for determining which type of loans can be offered to an applicant. Most of the lenders today (whether that be a bank, auto loan dealer, etc.) often look at your credit history. They will particularly check your credit score to gauge whether you are capable of borrowing or not. Here in Australia, there are many credit scoring systems that lenders refer to in the loan application process. The important thing is that you must qualify for at least the minimum score that they require for auto financing. If you don’t know your credit score we can help you with this process and find out before you wreck your credit rating. Remember that research about a lender’s credit score requirement is essential. It also wouldn’t hurt to develop a good credit standing and strategy early on.
Tip #2: Prepare Accurate and Complete Documentation
In general, lending institutions follow a know-your-customer policy when it comes to granting loans. It doesn’t matter what type of loan you are applying for, all that matters is that you can prove your borrowing power to the lenders. This is where careful and strategic documentation comes in. Preparing your paperwork is the most crucial, yet severely underrated, stage in the loan application process. You are required to hand in a certain set of documentation to the lenders. These papers will help them verify your credit record, and they may ask to look over your bank statements, monthly income and personal information, all to determine your capacity to pay. Submitting poorly-prepared paperwork to lenders can be risky. For one, you may have incurred some typographical error with your name. Just that one minor mistake can set your application back a few weeks. Other more problematic mistakes may have slipped through, causing further delays to your application. If you wish to have a smoother car loan application process, always go over your paperwork multiple times. If you don’t have the time to handle all the paperwork, you can always consult with a loan broker to do the work for you.
Tip #3: Get Pre-Approved Before Shopping
It would be best if you have already got a financing offer from a bank or lender before you walk into a car dealership. Pre-approved offers simply guarantee that you already have a loan to cover the cost of the car that you wish to purchase. Through pre-approved loans, car dealers can be more at ease at negotiating prices and deals with you. When you walk into a car dealership with a pre-approved check or coupon in hand, you are essentially considered a cash buyer. Dealers will be more open to offering you better cars at better deals, instead of the other way around. How can you get pre-approved? You can ask for pre-approved car loans from lending institutions like credit unions, banks, and online lending brokers like Nu-Age Loans. This Perth-based lending organisation have a lot to offer when it comes to car loans. They have incredibly flexible loan deals that can suit your needs at the moment.
Tip#4: Calculate All Costs
Another factor that a lot of car loan applicants underestimate is the total cost of their loan. Try not to fall into deals that may seem very affordable upfront, but end up costing you more in the long haul. Take the interest rate into account and understand all the factors that go into settling your car payments every month. You also have to think about other things like the downpayment you may have to pay, how much will be left with you every month and the loan terms. If the loan terms run longer than the estimated lifespan of the car you are purchasing, perhaps you should take it as a bad sign and look for another lender that can give you a better deal. Otherwise, continue to be wary about loan deals that seem too good to be true at first because chances are, they really are. To help you with such tedious calculations, you may use an auto loan calculator. Punch the numbers and see if you can afford to live off of the remaining amount each month. It is always better to overestimate things than to run short at the end of the month. Not only will you save a lot of money in the long run, but you can also save yourself from major financial liabilities in the future.
Tip #5: Learn All that You Can About Dealership Financing
There are so many things to learn about dealership financing. One of the things you need to realise is that deals can be trickier than they seem. Car finance loans are easier to navigate when you work with a trusted lending agency like Nu-Age Loans. Ideal car loan rates in Perth, car loans in Perth that are affordable – these are just some of the things we can offer. For more information on how we can help you get the car that you want, reach out to us today.