Getting a new car is always an exciting time, but it can also be a bit confusing when gathering all the information to do with car loans.
We’ve put together a checklist of some of the most important questions to consider asking lenders when getting a car loan, so you get the best information in the lead up to making some big decisions.
What kind of fees are associated with the loan?
The cost of a car loan depends on how much is borrowed, how long the loan term is, and what the interest rate is being charged on the balance of the loan.
There are also other fees that can be applicable for your loan.
These include prepayment fees, declined direct debit fees, missed payment fees, information fees and more. Make sure you find out exactly what fees are payable.
Will I get penalized if I pay out the loan early? Can I make extra payments?
There are different ways of repaying your loan in advance. Certain lenders allow for it, but some do not. It’s best to clarify this with your lender or your loan consultant to check.
Paying your loan in advance may incur some fees, but the amount varies depending on your lender.
Is my interest rate variable or fixed?
Different lenders offer both Fixed rate and Variable Rate loans. With variable rate loans, a change in interest rates may occur during the loan term, however you usually can make early or additional repayments for no extra cost.
With a fixed rate loan, the interest rate does not change, which means that repayments will stay the same. In this case, you are protected from any interest rate increases.
If you’re still feeling confused, it’s always best to have a chat to an expert car loan consultant, just like one of the team at Savvy.