COMPARE CAR LOANS

Everybody is different and this will depend on your personal circumstances. How much you can borrow depends on your financial history and your ability to make the repayments. The lender takes into account your income, along with other monthly financial commitments like school fees, mortgage or rent, insurance and credit card payments

It’s a good idea to do your homework to see how much you can afford before you take out a loan. Car loan terms can be as long as seven years, so you need to make sure you don’t lock yourself into repayments that stretch your budget.

As well as the monthly repayments, check the fees and any other costs attached to the loan. It’s worth speaking to a financial professional before you make any big commitments.

While you’re crunching the numbers, it’s also worth considering your car’s ongoing running costs which can soon add up.

Running costs include:

• CTP insurance
• Comprehensive car insurance.
• Registration
• Servicing
• Fuel
• Tyres
• Repairs

You can compare and apply for a car loan through Compare Club Car Loans. It can be a quicker and less time consuming process than going through banks, other finance and car loan companies, or car dealerships. With Compare Club Car Loans, you can also compare loans side-by-side, making it easier to understand if you’re getting a good deal.

Car loans will have different interest rates and features, so think about what you want from your loan. Can you make extra payments or pay out the loan early? Can you choose the repayment period? Are there monthly fees? Is there a balloon payment? Be sure to do your research on loan costs beforehand. That way you’ll be in a better position to find a deal that’s right for you.

You’ll be full of adrenalin having just (almost) purchased your car, so be clear on how much you’re prepared to pay – and borrow. And don’t forget to read the fine print. Dealerships may also offer you add-on insurance so don’t feel pressured into anything you don’t need.

It is possible to get a car loan without a deposit but you could potentially have to pay more in repayments and interest in the long run.

Paying a deposit not only saves you money over the course of the loan, it could speed up the approval process and increase your chances of being approved.

A car loan is generally taken out over a period of two to seven years, which is a long commitment. So the more you can afford to pay upfront, the less you’ll need to borrow. And that means your repayments will be more manageable in the future.

Rates change on a regular basis, so keep an eye on rates before you apply for a loan. Make sure you look at the comparison rate as well as the interest rate. The comparison rate helps to give you the true cost of your loan and helps you estimate your repayments.

Lenders may also offer different Interest rates, based on whether you’re using the car for personal or business use. If you plan on using the car for both, chat to your lender or accountant about the best option. Your credit score and income may also affect the interest rate.

When you reach the end of your loan and have made all the repayments, a balloon payment is the final amount that you pay as a lump sum. It’s also known as a residual payment. Not all loans have balloon repayments, so if you have one it will be clearly stated in your car loan contract.

A balloon payment will keep your repayments lower over the course of the loan. But in the end, you’ll have to pay the lump sum with interest which increases the total cost of the loan.

If you choose a balloon payment, it’s important to budget for it in advance. You don’t want to have to take another loan to pay off the lump sum and interest.

Car loans are available without a balloon payment, but keep in mind your repayments will be higher.

Most car loans are secured, which means your car is generally used as security. So if you don’t pay the loan back on time, the lender has the authority to repossess your car and sell it to get back their money.

If you don’t want to put up your car as security, unsecured car loans are also available. However, the interest rate will be higher and your borrowing power will be limited. Unsecured loans are usually reserved for used cars with much smaller loan values.

A comparison rate is a single figure that takes into account the interest rate as well as any extra fees. This could include monthly service fees, application fees, default fees and more.

When you’re shopping around and comparing rates, make sure the loan amount and loan term you select are the same, otherwise the rates might be skewed.

For example, a two-year loan may have a 24 x $5 monthly account fee totalling $120. Yet a four-year loan at the same interest rate would have $240 in monthly fees.

Don’t worry if you need a bit of help understanding comparison rates. Compare Club’s expert team is on hand to help guide you through the process.

Just like home loans, you can refinance a car loan to get a better deal. Whether you want lower monthly repayments or more flexibility, there can be many benefits to refinancing.

Typically you need to be meeting your car loan repayments with your current lender before you’ll be considered for refinancing. Not missing payments will give you a much better chance of being approved for a new loan.

By refinancing your car loan, you could:

• Adjust your loan amount
• Lower your monthly repayments
• Pay less in variable interest
• Lock in a great fixed interest rate
• Reduce your loan term to pay it off faster
• Extend your loan term to lower your repayments
• Access new features such as a redraw facility

It’s important to check your current loan contract to see if early exit fees are payable. You don’t want fees to outweigh your potential savings.

When you refinance a car loan with a new lender, they’ll pay out the remaining balance of your old loan. To ensure you’re not charged any interest or fees from your old loan, it’s worth making sure your old account has been closed.

It varies. Compare Club can find you quotes in just 60 seconds and the full application process takes between 10 to 20 min to complete. We can get your application submitted to the lender of your choice on the same day for approval. That said, some providers can take as long as a week.

The lender will need to verify your income and do a formal credit check. If you have a bad credit history, your application approval may take longer as the lender performs additional checks.

Like any loan, you will need to provide personal information and paperwork.

You will generally be asked to provide:

• Proof of income – usually two current payslips
• Bank account statements
• Photo ID such as a driver’s licence and/or passport
• Other ID such as a Medicare card
• Details of expenses, like rent or mortgage, school fees and credit card payments
• Information about the car – model, make and year
• Proof of comprehensive car insurance if the loan is secured

Comparing car loans through Compare Club will not affect your credit score. The initial quotes we show you involve a soft credit check (sometimes known as a soft inquiry). This is commonly used by lenders as a pre-approval tool or a background check.

The soft check will appear on your credit history but won’t affect your credit score. We run soft checks to help filter out any lenders on our panel who may decline your application.

Applying for a car loan through Compare Club will result in a hard inquiry. This is where a lender checks your credit report when you apply for a new loan. Hard inquiries will affect your credit score.