Getting a car loan isn’t difficult in most, however, in most cases people forget to prepare for it. As users or soon to be car owners, it is important for you to understand essential financial terms and technical processes before you apply for an easy car loan. You’ll get a variety of car finance solutions and related information from financial institutes or banks, but an aware consumer like you shall never take the risk. 

If you are someone who is thinking of submitting easy car loans soon to get behind the wheels of your favourite second-hand car, then this article is what you need. Well, let’s begin with learning a few things about the process of getting a car loan.

Types Of Car Loans

Whether you’re willing to work with a broker or go directly to a lender, you need to choose the car you want to apply loan for. Once you’ve picked which car will best fulfil all your needs and wants, the second step is to choose which type of car loan you want,  a secured and unsecured car loan. By means of a secured loan, you’ll have to provide collateral to the bank or to the lender. The collateral acts as a security against any financial loss that could happen during the loan repayment duration. In Australia, people mostly prefer to take a secured loan against the car itself. 

While in an unsecured loan you don’t need to provide collateral. Thus, an unsecured loan is riskier for the bank or lender. This is one reason why unsecured loans have higher interest rates. 

Components of Car Loans

Some of the key components of car loans are: 

Interest Rate

It is the amount charged from the borrower against the loan. This amount differs from lender to lender. It also greatly affects the total amount of your car loan. So, before you opt for the easy car loan, look at the percentage of interest rate. 

Loan Term 

The loan term is the agreed time period within which the borrower promises to pay the car loan back to the lender along with the interest rate.  In Australia, a general car loan term is between three to seven years. If you choose to have longer-term, it will reduce your monthly repayments but increase the interest rate simultaneously. 

Repayments

These are the smaller amounts contributed towards repaying the borrowed car loan. You can gain the flexibility of paying the instalments per week, fortnight, or every month.  This means the more frequent the repayment schedule, the faster you’ll be able to repay the entire loan amount plus less interest rate. 

Balloon payments 

Some lenders allow balloon payments. Well, as the name goes, it is the remaining larger payment amount you can pay at the end of your loan term. Choosing this option means you will have to pay more interest amount. 

Fees 

Besides loan amount and interest, you’re obliged to pay fees and charges to get easy car loans. This includes the processing fee, establishment fee, registration fee, documentation fee, late payment fee, early payment fee and so much more. 

The alternative for an easy car loan

With such information at hand, you can apply to get a loan easily. But, what if, we tell you about an alternative for this? Well, luckily, there’s something called rent-to-own. Under rent-to-own, you don’t have to worry about lock-in contracts, bad credit scores, or not having enough money to buy a car. At Freedom Cars, you can take full advantage of this option and ultimately save yourself from the process of an easy car loan application. 

Visit Freedom Cars to learn more. 

Source URL: https://www.freedomcars.com.au/about