How to reduce your car loan repayments
With car prices rising rapidly over the past few years, many are looking at ways to get their repayments down.
The best thing to do is speak to a finance broker who can compare your options and find a loan product that is right for your personal situation. You’ll likely be able to compare different products and features to find a good fit.
Here are some of the things to look out for when trying to reduce your car loan repayments:
Put down a deposit
These days, there are many different loans on offer, both through lenders and dealers. Dealers can offer attractive terms such as no-deposit loans, however, if you’re looking for a lower interest rate and a more affordable loan, this type of product might not be the best.
By putting a deposit down, you might be able to find a loan with lower interest.
Look at the features
While it might be helpful to have a loan with many different features – like the ability to repay your loan faster or even a redraw facility – these additions might come at a higher overall cost.
Ultimately, these features might cost you more upfront but save you money in the long run, especially if you can pay out the loan faster.
Hybrid and electric cars
Hybrid and electric cars are popular choices at the moment. It is possible to get loans that offer competitive deals to entice people into this type of vehicle.
Again, the best thing to do is to speak to a finance broker who can compare your options before you begin your search for a vehicle. If an electric car is something you’re interested in, it’s worth seeing what type of finance solutions are on offer.
Improve your credit
Irrespective of the type of loan you want to take out, a lender will always look at your credit rating when they are deciding what interest rate they can offer on a loan product. Typically, lenders will assess those with lower credit as higher risk and expect them to pay a higher interest rate.
By looking to improve your credit rating through paying bills on time (or early) and cleaning up old debts or errors on your credit report, you stand a better chance of obtaining finance and a better interest rate.
