When it comes to car finance, a lot of the decisions often come down to finding a comfortable balance. Whether it be between car repayments and loan length or interest rate and repayment flexibility; finding a car loan that has the right balance for you, your budget, and your lifestyle is essential when purchasing a car.
There are four types of car finance that you’ll need to choose from: variable, fixed, secured and unsecured car loans. Selecting the right type is essential in ensuring you stay in control of your loan for its duration.
The interest rate on a variable loan is dependent on the lender, meaning your interest rate may rise or fall over the course of your loan.
By far the most common car loan product offered by lenders, the interest rate on a fixed loan is consistent for the duration of the loan, therefore your repayments will always be the same.
With a secured loan, the car you wish to purchase is used as an asset for security against the loan. This is considered a low risk loan by lenders.
Unlike a secured loan, an unsecured loan does not use the vehicle you are purchasing as an asset for security against the loan. In order to qualify for an unsecured loan, you need to be able to demonstrate financial stability to the lender. This can include showing a history of savings or having previously met the repayments on a different loan or credit card.
Knowing which loan type is right for you will certainly allow you to integrate your new repayments into your life as seamlessly as possible. Whether it be a fixed or variable, secured or unsecured loan, making an informed decision should always be your highest priority.
To get an idea of which loan type would work best for you, reach out to Auto Car Loans on 1300 301 051 or contact us through our contact page to get started.
Tags: Car Dealership Finance