Car Loans
If you are
looking to finance the purchase of your next vehicle then chances are
you will do so with a car loan. The cost of borrowing varies widely
with banks, loan companies and credit card companies all offering
confusing rates and special deals.
Thankfully you
can compare most standard car loans by checking the APR (annual
percentage rate) which under UK law, must be displayed. This rate
will show the interest that must be paid, the term of the car loan
and any fees associated with taking out the loan. The lowest rate
will normally offer the best value. However there will almost
certainly be additional charges for late or missed loan payments. You
will also need to check if the rate advertised is fixed or variable.
Fixed rates will ensure your payment remains the same throughout the
car loan term whereas variable rates could go up or down if interest
rates should rise or fall.
Once you have
decided upon a budget, the amount of car loan required and the term
you wish to pay it back over, you can start to compare the offers
available. Make sure you can afford the deposit (if required) and the
monthly repayments quoted. Lower payments over a longer term usually
mean you end up paying more back. Check if you can pay the car loan
off early without hefty financial penalties should you suddenly have
enough spare money to do so. You may also like to consider payment
protection insurance in case of redundancy. This is an additional
monthly cost which but you may feel offers you peace of mind in the
event of losing your job.
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