New Car Loan: Setting the Limit – Know How

Written By: admin on December 8, 2008 No Comment

Thinking about changing your excellent ol’ Rusty McSneeze with the latest sleek coupé may get you high for a few days. So, before you went down crashing to the earth like puffed-out balloon, I strongly advise you to set your limit on the repayment. It is surely not something fun to do, considering that the car of your dream might end up to be the car-of-reality, something you can just afford rather than be proud.

Many people don’t set their limit; some even don’t know what their limits are. So, here are few tips to set it out:
#1) Prepare a Maximum Limit budget; means that you should write down how much money you could spend on buying a car. Analyze several or even all different car loans available. Compare their rates, interests, plus details about the lenders –for security purpose.
#2) Count the safety range for your monthly repayment installment. The cost on repayment should not exceed 20% of your income after meeting all the necessities.
#3) Do some counting on other expenses for the car, eg.: fuel, licensing fee, and other petty expenses of the car (car shampoo, anyone?). Do some more counting for sales tax and registration, after the expenses above are met.
#4) Check about Conditions of Disbursement of Auto Loans –whatever they call it. Anyway, different lenders provide such loans on different terms, different interest rates, and different time limits for repayment. Generally, 10% of the loan is paid as down payment, and then they give you fixed rates for the rest. For loans with zero down payments, generally the rates are much higher –to reduce the rate, try paying back the loan amount in small period of time.
#5) Go online (gosh, how many times I’ve mention it). These days online companies offer quotations, on request, and absolutely free of cost -plus you could have the opportunity to collect & compare as many quotations and choose the alternative that suits you best.