Kyle Ryhs from Badcreditcarloan.com.au discusses the most important elements to getting your first car loan. Getting your first car loan can be an exciting time, but it is important to try and understand which lenders are more flexible with first time borrowers, as some lenders are hesitant due to the fact that the borrower has no history and other lenders can charge much higher interest rates due to the lack of history.
Here are some tips you should consider as a first time car loan borrower.
Tip 1 – Deposit
If you are able to commit some cash deposit to the car loan proposal, this will show some commitment to the motor financier and actually take away some level of risk for them. This can give you more lender options, which could result in better car loan interest rates.
Tip 2 – Savings History
If you don’t live from week to week and have been able to have a bank balance that has increased over time can show the motor financiers that you have surplus funds from your income, which can give them comfort knowing that if they give you a car loan, you may not struggle to repay this. As the motor financiers have no previous credit history, they may view your statements to get some idea on your normal spending habits.
Tip 3 – Credit File
Be very cautious about applying for any type of credit, unless you are confident you will be going through with it. Often inexperienced borrowers will apply for finance at many institutions looking for the best deal, and this can actually prevent you from gaining approval from some lenders and can affect your interest rate with others.
Tip 4 – Vehicle
Motor financiers prefer newer model vehicles when they are using them as security of their car loans. Once the vehicle starts getting over the 5 year old mark, will restrict you from using many lenders and could also affect what interest rates you could achieve.
On the other hand, looking to buy an expensive car as a first borrow may also not be the best way to getting your first car loan. A suitable first lend may be a newish car around that $20000 range, but this would be reviewed on a case by case basis.
Tip 5 – Engage The Services Of A Finance Broker
Using a professional can take a lot of the guess work out of it and they can ensure they place you with the best lender first time preventing many enquiries on your credit file and maximising the chances of getting you the best interest rates.