Having a New Car Loan: Ponder Before Purchase
Having a new car loan is probably the simplest way to get the car of your dream. But, is it so? Well, we’ve found several minor stones that could get you either the car of your dream or simply the car that your pocket could afford.
Before we dig a bit deeper, let’s stop and question yourself (at least, I questioned myself):
- What is my current financial situation (answer this honestly, please).
- How am I expecting my financial situation to change in the coming years?
- What kind of car do I want?
- Is it likely that I’ll want to refinance at some time during the life of the loan?
- Could I afford insurance? In this case, health and auto insurance.
Wrote the answer in a piece of paper, and again, be honest to yourself. It is no use thinking about having an Aston Martin if the amount of the loan sponged up more than half your monthly salary.
So, either you’ve choose to buy a Martin or not, there’re several things you should keep in mind before choosing a car loan.
1) Credit history –try to have a clean credit history. There are lenders who’ll lend you money even if you have a terrible credit, but they’ll probably make you pay high interest rates.
2) Compare rates –get several quotes and compare. No use paying higher if you could pay at the best price (read=lowest price).
3) Transfer Balances –keep an eye of a hawk on hidden fees and transfer balances that may not be seen at first glance.
4) Required information –never scoop more than what you can swallow. Lenders will require your financial information (eg. whether you own/rent a house, how much you spend on your other loans and credit cards, those kind of stuff).
5) Pre-Payment Penalties –see if the loan contract has such penalty. Reckon about it if you reckon you’d likely to refinance your loan at some time during its life.
6) Simple Interest Loan –it’s the best advice I’ve ever had: never get any car loan that is not a simple interest loan.
Other things to question when choosing a car loan:
• Is there any other interest rate? If yes, what rate can be offered?
• Are there any possibilities of repayment? If yes, what is the allowed time of repayment?
• What down payment will you make?
It is vital to go through the car loan contract thoroughly and be sure you know each and every word (and those teeny weenie sentences below). Don’t let your adrenaline or anyone rush you through the thinking process. If you can’t, question an expert. If you do things right, it is likely that you’ll have the car of your dream with loan that won’t push you over the edge at the end of the year. Pleased hunting!
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Tags: auto loans, auto refinance, bad credit auto loan, car financing, Car Loans, Car Loans, car refinance, Loans, Loans, low interest car loans, new car loanTags: auto loans, auto refinance, bad credit auto loan, car financing, Car Loans, car refinance, Loans, low interest car loans, new car loan
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