September 21, 2018

What is a Secured Car Loan and Why it Can Be Cheaper

There are so many lenders offering different types of car loans in Australia nowadays, and finding the car loan that suits your needs can be time-consuming. But don’t fret. You can make the selection process easier and at the same time, enable you to save money.

So how do you choose the car loan that suits your needs without leaving a hole in your pocket? Drive away with the best offer by taking these things into account:

Compare options

Different lenders offer different loan features. To choose the best car loan, consider looking at the offerings of several providers and narrow down your selection based on your needs and financial situation. There are many loan comparison sites that you can use to check car loan rates and get the best offer.

What do you need to look for? Before you apply for a loan, make sure to check the interest rate, actual loan term, frequency of repayments, and fees.

Opt for a secured car loan

There are many car financing options, but if you want to save money, you may want to check out a secured car loan. In this type, your vehicle serves as collateral security for the loan. This can be cheaper in the sense that the secured car loans tend to offer lower rates.

Reduce monthly repayments

One way is to get a smaller loan – it may sound obvious but if you borrow less, you will have smaller monthly repayments. You can also consider a residual balloon payment which will be paid at the end of the loan term.

Use a car loan calculator

This will let you know your total monthly repayments as well as the interest that you need to pay. There are many car loan comparison calculators online. In general, they’re easy to use. Just input your loan amount, term, interest rate, as well as the frequency of your repayments.

Check the fine print

As with any other form of contract or legal document, always read the terms and conditions very carefully. There may be hidden fees that will cost you more than you intend to pay.

When it comes to finding the right car loan for your needs, the cheapest may not always be the best. You may think that a car loan with the lowest interest rate is the best offer. It’s not always the case, since it may come with fees that add up and can result to higher monthly costs.

Do you know other ways to compare car loans and car loan rates? Share your tips in the comments section below.

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