7 tips for a hassle free car loan

Anyone who has bought a car or a house can vouch that a large purchase can send stress levels through the roof: these are high stake purchases with a lot to lose if they go wrong. You need to make the final decision on the car that’s right for you, but we can help you get the money side right.

1.Know your credit history

Before you apply for a car loan, check your credit score. You can get a free copy of your credit report online. Credit scores reflect your borrowing and debt history and help banks decide if they should lend to you and at what interest rate.

If you’re credit rating isn’t great, don’t despair. Talk to QBANK about your credit history and the loan you want, and we can help you with a plan to clear your debts and establish a regular savings pattern.

Tip: It’s a myth that checking your credit report and score has a negative effect on your credit rating.

2.Consolidate your loans

Having multiple loans can be a financial liability. It may be worthwhile consolidating your debts into a single loan to simplify your budget and access a lower interest rate.

3.Have a budget

Before you go anywhere near a car yard, do your research. Decide what kind of car you want, find out the market value for that model and decide how much you can spend. Use our car loan calculator to crunch the numbers and figure out your budget.

Knowing what you want and the repayments you can afford puts you in the best position to make a financially sound choice. You’ll be less likely to be talked into buying a car you can’t afford and have the freedom to enjoy your new purchase, not worry about covering repayments.

Tip: Try to pay off your previous car loan before buying a new car. Even if it means waiting 12 months or more, it’s better than paying off a car you no longer own as well as a new car loan.

4.Get your finance approved first

Walking into a car yard with approved finance puts you in a powerful position to get the best deal, as well as making you less likely to overspend. Doing the prep beforehand also means you can act quickly if you find the perfect car.

Tip: Don’t be tempted to make a bunch of loan applications at once in your hurry to get approval and get the deal you want. This can have a negative impact on your credit history and your likelihood of getting a loan at a competitive interest rate.

5.Know your options

There are several options for car loans:

  • a secured car loan, which gives you a lower interest rate, but is secured to your car – so it can be repossessed if you don’t make your payments
  • an unsecured personal loan, which has a higher interest rate, but lets you borrow a bit extra (in case you need some back up for insurance… or seat covers)
  • adding your car loan to your mortgage through a redraw facility or a line of credit – this gives you access to low interest rates but it can take much longer to pay back if you’re not actively reducing the debt. You may pay less in repayments now, but over the term of the loan, the interest may make your car cost more than you bargained for.

Tip: Understand the terms of your loan – if you want to try to pay it off quickly, check you won’t be penalised for making early repayments.

6.Put insurance on your to-do list

It can be tempting to skimp on insurance, especially if you’ve just forked out for a car. But car insurance is a must, even before you drive it out of the car yard. Look for insurance that’s competitively priced, easy to arrange and simple to claim. The last thing you need if you have an accident or there’s damage to your car is a complicated claim process that leaves you stressed and waiting to get back on the road.

7.Get some help (and maybe a discount)

Sometimes things are best left to the experts. Forget endless visits to car yards on the weekends and haggling with dealers, our free car buying service uses our industry contacts to get you the best deal on a new or used car from a network of preferred dealers. You tell us what type of car you want, your budget and the features that are non-negotiable, and we’ll do the rest.

Start your engine

If you’re ready for a new car, we’re ready to help with a hassle free car loan and insurance to protect your investment. Talk to QBANK or call 13 77 28.

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Car Buying

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