By: Raymond James
If you are in the market to buy a new or used car, you will want to secure a loan effortlessly and efficiently. While there are many lenders available for getting a car loan in Australia, it’s important to know how to apply and what it takes to get the car you want.
Here are eight ways you can get a quick car loan, so you hit the road sooner.
Check Your Credit Report
The first thing you should do is obtain a copy of your credit report to check your credit score and income as these are key factors in determining how much you are able to borrow when searching for quick car loans. Depending on your score and income, this will impact the interest rate you may get for the loan.
You should thoroughly review your credit report, which you can obtain for free from one of the major credit bureaus. This report shows a detailed record of your history as a borrower as well as any credit card or loan applications you’ve recently made. If you notice any errors or discrepancies in the report, it’s essential to immediately report them so they can be amended, and it doesn’t impact your credit score. The higher your credit score, the more options and better interest rates you may have, however, if your credit score is under 600 there may be room for improvement.
Things to Consider When Choosing a Lender
Not all lenders are the same so it’s important to look at the following when choosing the loan that is right for you and your financial situation.
- Annual percentage rate (APR) – This is simply the interest rates and fees lenders include when they extend a loan to you.
- Loan terms – This is the amount of time you have to pay off your loan. Look for preferred terms of no more than 60 months
daysfor new cars and 36 months daysfor used cars.
- Down payment – This is theamount of money you have to put toward the total cost of the car initially.
- Taxes and fees – The total cost of the new or used car, including taxes and extra fees.
Depending on the lender, getting preapproval may mean a soft or hard credit pull. Hard inquiries are tied to an actual credit application and can affect your credit score, while a soft inquiry occurs when you check your own credit or when a lender or credit card company checks your credit to preapprove you for an offer. These inquiries also help give you a better idea of what type of interest rate you may get.
In getting a vehicle loan, you can either apply for conditional preapproval for a certain amount before you go shopping, or you can find a vehicle, negotiate a price and then approach a lender to access the necessary funds.
Use Your Loan Offer to Create a Budget
Getting pre-approval for a loan can show you how much you can borrow based on your current financial situation. However, in addition to that amount you should factor in another 10 percent for taxes and fees.
Use a car loan calculator to calculate your repayments and create a budget which should help you plan for regular repayments that you’re comfortable affording.
Review & Finalize the Loan
Before you sign a loan contract, carefully read over everything to make sure there’s no red flags and your personal details are correct. This includes looking for the following:
- Hidden fees.
- Longer loan term options.
- Any add-ons you didn’t request.
- Early payoff penalties.
Make Timely Payments
Making all your monthly payments toward the loan on time will help improve your creditworthiness once you have made your payments for at least six months.
About the Author:
Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals.