October 19, 2018

How to Save Money on a Car Loan

Getting the best price on a car is equally as important as getting the best price on a credit deal. Before you go shopping for a car, shop around for credit so that you can find a loan that best suits your circumstances and your budget. The majority of credit providers will give you ‘in principle approval’ for a loan, this gives you an idea of exactly how much you are entitled to borrow; therefore, you are less likely to feel tempted to spend more than you can afford. Here are some tips to assist you in car loan comparison.

Consolidate your debts

If you have multiple debts, you may want to consider consolidating them into one loan to save some money. One loan means one interest rate compared to the four, five or six you are currently paying. Once your debts are covered the remainder of the loan can be used to pay for your car.

Improve your credit rating

You won’t save any money on a car loan if you have got bad credit. A low credit score means a high interest rate; therefore, before you go looking for a bad credit car loan, improve your credit rating so that you can get a better deal.

Round up your payments

When you make a payment, round it up to the nearest hundred dollars. This way you will be able to pay the car off faster and you will save money on interest payments.

Never skip a payment

Some car loans will allow you to skip a payment during holiday seasons so that you can free up extra money to do other things. Don’t take up the offer, all it means is that your loan is extended and you will end up paying more interest.

Make additional payments

If you just so happen to come into some extra money, use a part of it to make additional payments on your loan. Whether it’s a work bonus, a tax refund or an inheritance cheque. The faster you can pay off your car loan the better.

Have any tips on how to save money on a car loan? We’d love to hear your comments.

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