Are you looking for ways to finance your car? There are a number of car loans available that will assist you in financing your dream car. These loans can be taken from different banks and lenders. But where should you start? What should you keep in mind when searching for the right options? Below are a few common questions people have regarding car financing.
1. The Interest Rate
You may have wondered what would be the interest rate if you settle for car loans. Will it remain the same throughout? Can it be lowered? Are other banks and lenders offering similar rates? All these things are important to know, to negotiate the right interest rate for your loan. If you want to know the interest amount you are paying, you can find that out through the Annual Percentage Rate (APR). The amount you will get will be the annual interest rate based on the loan unpaid balance. This will also be based on the credit score, which the dealer will calculate by viewing your credit report.
2. Second-hand Car Loans
If you are planning to buy a second-hand or used car, you must have questions regarding the availability of loans for such cars. There are lenders and banks that offers loan for the purchase of second-hand cars; however, the interest rates of loans are higher as compared to new vehicles. Moreover, factors such as car value and repayment capacity are also assessed before the loans are offered.
At times you may have to bear penalty, in some circumstances, for paying the loans early. Important questions regarding car finance and penalties that you should ask include:
- Is it possible to make early payments without penalty?
- Will there be any other penalties in the loan?
- Will there be any additional charges with the loan later on?
- Does the loan come with any hidden charges?
- How can you get rid of the penalties?
4. Car Loan Term
The time span of the car loans on average can range from 1 year to 5 years. People can also opt for a loan that has lower tenure by having a higher equated monthly instalment (EMI). If you find EMI expensive, you can opt for higher tenure loans. The loan tenure by some lenders can even go up to 7 years.
5. Loan Amount Eligibility
If you have decided on the loan option to finance your car, you would want to know the amount that you would be eligible for. Most of the banks and lenders can give you the loan of up to 90% of the car value. Lenders make this decision by noting the type of vehicle, cost, value in second-hand market, and many other factors. What’s more, there are lenders in the market who would be willing to offer even 100% of the car value.
So keep you documents and loan application ready, and ride in your dream car in just a week.Learn More