If you’re new to car loans, it’s understandable if everything can get a little confusing. With so many different lenders, options and financial jargon it can be hard to know where to start. Luckily, with a little help, you’ll know how it works, exactly what you’re signing up for, and find the right car loan for you.
What do I need to know about car loan interest rates?
Interest is the car loan money you pay, on top of the car sale price, to a lender. An interest rate is the proportion of a loan that is charged as interest. It’s usually presented as a percentage, per annum (or year). Your interest rate is usually dependent on a few factors – including your credit rating. If you get a car loan with a fixed interest rate, you’ll know how much the rate will be for the full period of your loan.
How much will my car actually cost?
When getting a car on finance, it’s always a good idea to know how much the car is costing, beyond the car price tag. If you get a $1,000 car loan for a period of one year, at 10% per annum interest rate, you would be paying $1,100 total for your car. There are nearly always some extra fees, like establishment fees, which will be included in your loan. If you’re not sure about how much these will be, just ask the lender.
What about repayments?
The total loan cost will be paid off in regular repayments, usually to match your income payments. Repayments are generally set up as a direct debit from your chosen bank account. You can use our handy loan calculator to work out how much your repayments might be.
What else do I need to consider?
It’s not all about interest rates. You might also want to consider whether the rate is fixed, how flexible the payments are, what the fees are,if the lender is responsible and credible, and whether you (and the car you want) fit the lender’s credit criteria. Credit criteria is the set of factors lenders look at when deciding whether to approve a car loan or not (every lender is different)
How do I apply for a car loan?
The application process is slightly different with different lenders – you might need to visit a store, email documents and bank statements, or apply over the phone. Here at Sprint we’ve made the application process as easy as possible, and 100% online. Simply apply online, where you will get access to your own online portal. Here you can upload any required documents (such as drivers licence). It’s also standard to be asked for bank statements when applying for a car loan – as responsible lenders, we need to ensure you can afford the repayments.
It’s a good idea to get pre-approved for a loan before you start shopping – so you’re ready to go with finance and know how much you want to spend.
What’s a ‘secured’ loan?
Loans can either be secured or unsecured. Car loans are generally always secured loans. Which means the item purchased (in this case, a car) is used as collateral for the loan. If payments are missed or defaulted, the lender has the right to possess the item to make up for any financial losses. The advantage of a secured loan is that they often come with lower interest rates, since risk for the lender is lower.
So, why Sprint for a car loan?
There’s a few reasons why we think Sprint Finance is the best place to come for a car loan!
We have some of the most flexible credit criteria in the country. We can offer finance for all credit and licence types. Whether you’re a learner or a season pro, and whether you have perfect or not-so-perfect credit.
We have fantastic rates, starting from 9.95% and no deposit required.
We make things easy – you can apply for a loan without leaving the couch.
Car loans is all we do, so we’re experts! Got a question? Just ask – you can chat online, flick us an email or give us a quick call.