Detail-Driven Decisions – 5 Things to Consider Before Applying For a Car Loan

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So, you’re thinking about getting some new wheels. It’s an exciting time – picturing yourself cruising down the road, wind in your hair, stereo pumping and sun shining. Unfortunately, unless you’re made of bucks, chances are that you’re going to have to finance your new purchase.

This isn’t something that should be rushed into. You need to take some time to weigh up your options and decide if taking the plunge is right for you. Let’s inspect five different things to consider before you begin filling out that application form.

Where to Get Finance From

There’s a saturated lender’s market out there. You’re really spoiled for choice. You could opt for finance for a new car from Latitude Finance, or try approaching one of the major banks. Both have their pros and cons.

Some lenders have competitive interest rates, while others may not pay as close attention to your credit history as others. Others still offer perks such as cashback and reward points. It’s worth doing your homework and picking a lender that’s right for you and your needs.

Can You Afford It?

Here’s the crunch – you may want and need a new vehicle, but when it comes down to it you need to be able to afford the repayments. If you’re financing a new car these can become quite costly. It’s a good idea to sit down and work out a budget.

Figure out how much you spend on mortgage repayments or rent, groceries, insurance, bills, other living expenses and credit card and other loan repayments. You’re going to want a buffer of a few hundred dollars a fortnight for car loan repayments. If you’re coming up short, you may want to look at where you can cut costs, or what you can live without if you’ve got your heart set on buying a car.

What’s Your Credit Like?

Lenders don’t like to take risks.

Chances are, if there’s a blemish on your credit file, including missed payments or defaults, a lender is going to be reluctant to loan you tens of thousands of dollars for a car. You can obtain a free copy of your credit report and credit score online, which you can then use to base your decision on.

If your score or report comes back with some bad news – don’t fret. There are some steps you can take to clear it up. Check out this helpful resource.

What Type of Car You Want

The type of car you want should factor into your reasoning. For example, if you’re after a small sedan or a hatchback, you may need to borrow a smaller amount than if you are looking to buy a luxury vehicle, SUV or a big, bugger-off ute or van.

Figure out your needs – do you need to transport the kids around? Do you need it for work, errands, road-trips or just to show off on the weekend? Once you’ve figured out your needs, you’ll know your budget and what type of loan you need.

Prepare For Red Tape

Loan applications can be complicated and time-consuming. It’s not as easy as you may think. You’re going to need to set aside some time to sit down and complete the application, either on paper or online. Read everything very carefully, including any special terms and conditions of the loan. You don’t want any nasty surprises coming back to bite you later on. Then, once you’re ready, fill it out, send it off and hope for the best!

There You Are

So, you’ve read the terms and conditions carefully, and put aside some time to fill out your application. You’ve figured out what sort of car you want, checked your credit score and history, balanced your books and picked a lender! Enjoy the ride from here on in.