If you are considering taking out a car loan then you will need to think very carefully about how much you can actually afford to borrow. You will have to make sure the repayments are realistically affordable for you as if you fall behind you could lose your car and still end up owing the lender more money.
Best APR Deals
When you are looking for car loans you will need to check the Annual Percentage Rate (APR). This will tell you how much interest you will need to repay on your loan. The lowest APR rates are the best in terms of saving you money but you will also need to balance this against the loan terms offered. If you have a poor credit score you may not be eligible for the best APR deals as you will be seen as high risk' by lenders. By taking the time to manage your credit products carefully and meet all of your repayments you can build up a good credit score. This will help to make you eligible for the best APR car loan deals.
Loan Terms
As well as checking APR you will also need to look at the individual loan terms. Short term loans will allow you to pay off the amount you have borrowed much more quickly and this can save you money on interest. However the monthly repayments will be higher, so you will need to check these are affordable for your budget. Long term loans will have lower monthly repayments spread over a longer period. This will mean you pay more interest overall. The whole process is a balance between choosing an established and competitive loan provider via a local trusted dealer at a budget you can afford for a new car you desire.
Loan Calculators
An easy way to work out what loans are affordable for your budget is to use online car loan calculators. These are available from leading car loan advisor websites and are very easy to use. You can compare different loan options easily with online calculators and this will help you to find out the real costs of each deal. The best advisers also compare the features and benefits of each of the main loan products typically available.