Buying a new car was a hassle, especially when you were short on cash. But now, time has changed. There's a lucrative way using which you can buy a brand-new car. Yes, you guessed it right, we're talking about car loans or car finance.
But how can you get a car loan or finance a car? What are the things you should keep in mind while doing so? Well, if you have the above questions in mind, read along. In this blog post, you'll find ample information regarding financing a car. So, let's begin the car loan and financing guide.
What Is A Car Loan?
A car loan as a secured personal loan. You apply for the loan and borrow the required amount to buy a car. Once the loan is approved, you can pay the amount only to buy the car. After that, you have to pay back the loan amount in monthly instalments with interest over the agreed period.
Different Ways Of Financing A Car In Australia
• Dealer Finance: It is an on-spot loan which you get at the car dealership. It has a lower rate of interest, sometimes even lower than 1 per cent. Also, it is pretty fast and hassle-free. However, it's available only for buying new cars.
• Car Loan: This loan is specifically meant for buying a vehicle. You can use a car loan for both used and new vehicles. You can avail features such as extra repayments and flexible repayment schedules etc. However, it is a secured form of a loan.
However, if you want someone to help you, contact Darwin Car Loans. In case you default your car will be held as collateral. So, you need to take care of this fact.
• Personal Loan: If you're unable to get a secured car loan, a personal loan is an option left. It has a higher rate of interest. Also, you need not display any asset against the amount you want to borrow.
How Can You Apply For A Car Loan?
If you want to apply for a car loan, you need to first find a bank. The best way is to apply for a loan in a bank you have an account with them. It also helps to have money, assets, and good credit when applying for car loans.
What Do You Need For Applying For A Car Loan?
You'll need a proof of identity while applying for a car loan. You will also need to prove that you can repay the loan on time. It means you'll need everything from your income proofs, assets and liabilities to the details of other loans. It is done to check your ability to repay the loan amount on time.
As we briefly mentioned earlier, a good credit score plays an important part here. It is proof of whether or not you had a good credit history. The lending party can also talk to your previous lenders. This is done to again check your how timely you made the repayments.
Here is what you will need in a nutshell for auto loan applications:
• Proof of identity like driver's license, passport or even Medicare card
• Pay slips as a proof of income
• Active loan documents, assets and liabilities
• Details of the vehicle
How Much Time Does A Car Loan Need For Approval?
The time required for approval can depend on various factors like your credit history. It also depends on what car you are buying. If you're buying a common car, it'll be approved in 48 hours or so. And for expensive luxury cars or trucks, it may take more time.
What Are Some Things You Need To Know While Financing A Car Loan?
1. Interest Rate And Total Fees
Ask directly about the interest and total fee that will incur. Also, make sure to compare the prices with at least two other lending parties. It will help you find the best and competitive price if you want to compare the price-free of cost.
2. Frequency Of Repayments
Check for all the details before you sign on the dotted line. Let's say you earn monthly, but the lending party accepts weekly payments or vice versa. It can be quite hard to manage if the repayment frequency is not in your favor.
What if you have little extra money and you want to pay extra for your loan. At the same time, some allow extra repayment and others don't. So, check all the terms and conditions before signing.
3. Balloon Payments
Some loans allow balloon payments while some don't. In a balloon payment, you just pay the interest over the agreed period. No principal amount is paid. And when the term is about to end, you need to pay the entire amount along with the last month's interest.
This may not be suitable for everyone. So, make sure to avoid balloon payment if you can. It will help you pay the debt with ease.
Wrapping Up Auto Loan Applications And Financing
Car loans have made lives easier. However, you should know everything about the same. You need to know about the interest, repayments, terms and conditions.
Here you can find good deals according to your requirements. Also, this company is trusted by people here in Australia. So, for a reliable car financing experience contact now.
