When you are looking to buy your first car or even add a new one to your collection, you will likely need to find a loan to help you do so, especially if you are buying a car that is brand new.
In some cases, the showroom or car lot you buy the car from will be able to offer you a loan, but you may also want to look around for a better deal. This will lead you to the internet, where it is fair to say you will be bombarded with loans and finance deals. However, how do you find the right option for you? Here is a short guide to help you choose a car loan.
Firstly, there are comparison websites that allow you to compare the monthly prices you will be paying across a variety of different loans from different companies. Still, while this can seem like the best way to find finance for your desired vehicle, checking the reviews of each lender is just as important as comparing prices.
For instance, companies like Auto Finance Online are a great example of the reviews a reputable lender should have. After all, what looks like a good loan rate may also come with poor customer service or issues with fees – but a firm’s customer reviews will shed light on those potential issues, so check them thoroughly.
Check the Fine Print
This is something that is always advised but is rarely done. Why? Because who wants to get out a magnifying glass or zoom the screen in 500%? When it comes to taking out a loan of any sort, make sure you read the entire contract. The fine print may contain information about the loan rates, the interest, and even the duration of the loan being potentially extended.
In any case, always read the fine print, and if it is written in difficult-to-understand legal and contractual jargon, go on to the following step below!
If you cannot make sense of the contract relating to the car loan, be sure to ask as many questions as you can. You can do this via email or telephone with most loan companies online.
Make sure you fully understand the term of the loan and ensure that if you have any more queries, you can contact the customer service advisors easily – who should always respond to you promptly if the company in question is indeed reputable.
If you feel that the representative is not answering your questions enough, or is avoiding contacting you altogether, move on to the next loan company – these are red flags indicating you should avoid that particular lender at all costs.
Flexible or Fixed?
When taking out a loan, there are usually two choices in terms of repayment options: flexible or fixed. A fixed repayment scheme will involve set payments and interest every month, which may go up and down with inflation. Generally, when compared to flexible loan repayments, these are more affordable.
Flexible loans and interest repayments are more varied, allowing you to choose how much you spend each month on the payments. But, overall, it is likely that these monthly costs will be higher, as you are choosing how much to pay. If you are self-employed or have a fluctuating income, this may be a better option for you.