Your finances determine whether you will become a new car owner or not. Most people cannot be able to save the huge amount of money that is required to buy a car. This means that you will have to get a car loan. However, when you are borrowing automotive loans you should always know that the lender is out there to make profit. They get their profits from the interest rate and other fees that you pay when you are applying for your car loan. As a general rule you should never trust the sales person completely. To get the most out of your car loan you should follow these tips;
UNDERSTAND ALL THE TERMS AND CONDITIONS:
· Before you put your signature on the loan form make sure that you have read and understood each word in the document. The loan form should clearly state the interest rate and the duration that you will take to repay your car loan.
· You should also know that the interest rate may increase before you have finished repaying your loan. To avoid exorbitant loans ensure that the loan application form dictates the maximum interest rate that you can be charged.
· Long term car loans allow you to repay in small installments that will not put pressure on your bank account. However the long duration means that you will end up repaying a lot more than if you had taken a loan that you will repay in a few months. This means that you will end up paying more than your car’s worth.
· Ensure that there are no hidden charges. Your lender should inform you about all the costs that you are required to pay.
CONSIDER HAVING LIFE AND DISABILITY INSURANCE:
· Some lenders may require you to have life or disability insurance when you are applying for a car loan. Even when this is not a pre requisite you should ensure that you have this insurance.
· Having this insurance means that the lender will still get the money even when you are disabled or when you die. This may end up lowering the interest rate since the risk of defaulting is reduced.
TAKE A FLEXIBLE LOAN:
· Things are always changing in life. This means that you could be able to repay your loan and then all of a sudden you hit rock bottom. Always hope for the best but prepare for the worst.
· You can do this by ensuring that your loan agreement provides you with flexible repayment methods that you can use during hard times. Find a lender that can allow you to make extra payments, pay lower installments or even repay the entire loan in a lump sum without any penalties.
· You can even look for insurance that will cover you when you default payments. This will increase the cost of your car loan but it will come in handy when the unexpected occurs.
IMPROVE YOUR CREDIT SCORE:
· Your credit rating is very important when you are applying for a car loan. A good credit score shows that you are willing and able to pay your debts.
· It also reduces the interest rate that you will be charged since the lender has proof that you are able to repay them.
To book the DSA driving test you need to have a valid e-mail address, payment card and a driving licence. This test increases your safety and that of other road users when you are driving your new car.