Tips on car loans by Advance Car Loans
Avoid unsecured loans if possible - Avoid using unsecured personal loans if you can put up some security for your borrowings. A secured Car Loan will get you a lower interest rate.
Be clear about leasing - Leasing is really just another form of borrowing to finance a car. But unlike loan finance, where you take ownership of the car and offer it or something else as security to the lender – lease finance sees a leasing company take ownership and give you the use of the car under contract for a specified period.
Be honest in car loan applications - Be honest about why you want the car loan. We may be able to offer you a car loan option that better suits your circumstances. There are an increasing variety of different types car loans, commercial loans, leases, home equity loans, are just some of the examples.
Cannot get a standard car loan? There are alternatives - If the banks, building societies and credit unions would not lend to you because you are self employed, newly arrived in the country or have a poor credit history, consider the booming non-conforming and low doc loan market. A number of non-bank lenders offer loans, which especially cater for this type of borrower. The interest rates on non-conforming loans are generally higher but come down after a few years of on-time repayments.
Check your statements for errors - There are claims that more than 50 percent of home loan statements contain calculation errors. Simple mistakes, like the entry of the incorrect balance or the application of the wrong interest rate at the wrong time can be costly and mostly favour the lender. We all make mistakes, even bank computers make them and that is why borrowers should keep a close eye on loan statements. Various software for your home PC is available that can run a check on your statements.
Consider smaller lenders too - When shopping around for a car loan, consider community banks, credit unions and other smaller financial institutions, which might be more approachable, and offer lower interest too.
Do you have to take out a personal loan at all - Think twice before borrowing money without security. You may have a better option already available; home equity extension to your home loan, a new loan that uses your property as security, a credit card, or even a rich relative.
Do not just take the dealer finance – Do not accept car loan or car lease finance offered by a car dealer before comparing the offer with finance options offered by your bank or other credit providers. Dealer finance might be less hassle but you could well end up with an expensive car loan and more restrictive terms and conditions.
Do not make multiple car loan applications – Do not fill out applications at several financial institutions and have all of them checking into your credit history. This can make you look desperate and lower your credit score.
Have the right information when applying - What you will be required to supply in any application for lease finance will depend on whether the lease is for personal or business use.
Personal lease applications will require:
- Proof of current employment
- Income details or tax returns
Business lease financing requires more detailed information and may include your:
- Balance sheet
- Tax returns
- Cash flow projections
- Business plan
Confirm with the car broker what you will need before the proceeding.
Applying for a Car Loan with Advance Car Loans is easy. Advance Car Loans can assist with selection of the right product for your requirements, prepare all the paperwork and submit it to the appropriate lender. As a finance broker (Advance Car Loans is a member of FBAA) Advance Car Loans is not limited to any particular finance company, so it can hunt around for low interest rate, help avoid hidden fees and charges and prepare the paperwork with the minimum of fuss and maximum of professionalism. Advance Car Loans can even have you in your new vehicle within 24 hours.
22-Feb-2007