The right lender matters, see why

When looking to get a car, you will be faced with many alternatives, especially in terms of the type of car finance. Closely related to this is the lender that you will use. There are several lenders available in the market, and finding the right one might be tricky. But it is very important that you do because this will determine how comfortable the repayment will be for you.

Getting car finance from the right lender generally means you will have a comfortable time when paying off your debt. You will not have to pay unnecessary charges or find yourself in a precarious financial position just because you decide to get car finance.

What to Do Before Choosing a Finance Lender

Before you even make a decision on the finance lender you will like to go for; you need to know certain things and consider some factors. This includes;

Your budget

If you are planning to get a car, it is expected that you have also considered how much it will cost you to get the car. This is what will be your budget. But that’s not all there is to budget. It should also include the running cost for the car within the year. This will include insurance, cost of servicing and maintenance and lots more.

Interest Rate

Another thing you have to consider and determine is the interest rate for car finance. Several factors will affect the interest rate, but it is always good to have a number in mind before you start looking for lenders. Low interest is always preferable, but you should make sure that there are no hidden charges attached, which could increase the interest rate. It is always better to have a fixed interest rate, as this makes it convenient for you to calculate how much you are paying.  For someone seeking car finance, a low-interest rate is a beneficial thing on many levels. It means the car finance you are getting will cost less, and by extension, the repayments will be more comfortable.

Duration of the Car Finance

The tenure of car finance is something you should also know before you get it. By determining how long the car finance will last, you can easily prepare for the repayments. The duration, repayments, and interest rates are closely connected. It is always necessary that you pay serious attention to this because it works with the interest rate to determine how much you will pay. For example, if the interest rate is low, but the repayment duration is long, you might end up paying way more than someone with a higher interest rate with a shorter repayment schedule. Thus, the secret is to make sure that your car finance duration doesn’t exceed the time it will take you to comfortably repay the loan.

Compare options

There are a lot of finance options available if you’re seeking car finance. There are options as to types such as lease, hire purchase, car loan, novated leasing, etc. There are also options in terms of interest rate, such as variable interest rate and fixed interest rate. You also have to consider the options based on the terms of the car finance you see. Doing all this will help you a great deal in finding a deal that fits your budget, and you can pay off comfortably. Most of the time, a car finance calculator will help you a great deal with the comparison such that at the end of the day, you’re settled on the ideal deal for you. It is very important to compare and avoid the mistake of going for the first lender that you come across. No matter how good a deal, the first lender might be offering you, always get a second, third, or even more opinion.

Enquire about processing Fees

The mere fact that a deal looks good at first glance doesn’t mean it is the best. You should endeavour to ask about the fees and charges attached. Lenders usually charge fees which include loan processing fee, credit report charges, documentation charges, stamp duty, charges for collection of registration certificates, charges for loan payments, charges for an amortisation schedule, bounce charges, swap charges, charges for loan cancellation, and many more. Asking about all these can save you the trouble of paying more than you bargain for in charges, and you can easily make an informed decision.

Ask about prepayment charges

It is important for you to also ask the lender about prepayment charges, if there are any. Generally, banks levy foreclosure charges, prepayment charges, and other fees in the event that you want to pay off the debts before the tenure finishes. Make sure you go for a bank or finance company that will charge you the least in such instances. There are also finance companies and banks that will not charge you anything as long as the prepayment happens after two years of issuing car finance. Going for this kind of lender is most beneficial.

It is important that you scrutinise any offer you receive, no matter how great they may look at first sight. Once you enter the market to look for car finance, you will find yourself with several deals to check out. At times, scrutinising all of them yourself might prove difficult, so you should consider using a car broker who will help you liaise with the lenders and get you the most suitable deal.

With a car broker, everything from getting you the car finance and the car itself can be handled without any effort on your part. All you have to do is provide your inputs on the type of car you need, your budget, and other personal details.

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