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Finding right car loans

Compare loans from different lenders before car purchase

When purchasing an automobile, the subject of financing can confuse or intimidate some consumers. Car loans vary widely in interest rate, terms, and flexibility; it can be challenging to determine which loan is right for you. In many cases, the interest rate offered by a traditional bank may not be the lowest available. Companies that specialise in automobile financing can often provide car loans at a lower rate; because financing is typically their only business, they are more willing to compete for your business and may offer significant savings over traditional lending institutions.

Generally, the interest rate that you will pay for your car loan is dependent on a number of factors including whether the vehicle is new or used, the duration of the loan, the cost of the vehicle, and your overall credit score. Typically, finance companies offer lower rates for new vehicles than for used; some lending institutions will not finance car loans for vehicles over seven years old. Longer term loans accrue more interest regardless of the initial interest rate, so it is usually to your advantage to select the shortest term loan that you can afford. Additionally, if you have experienced credit problems in the past, it may be beneficial to research your credit score and clean up any outstanding debts or problems before applying for a car loan. Improving your credit profile can shave points off your interest rate and save you money throughout the life of your car loan.

The most important element of finding the right car loan, however, is comparison shopping between various lenders. A number of helpful websites offer side-by-side comparison of interest rates from Australian automobile financing companies, allowing you to determine at a glance which one offers the lowest rates and most favourable terms. While the rate you ultimately receive may be higher than the original quote, usually the results shown are close to the final interest rate for your loan. By researching the numerous options for auto financing, you can be certain you’ve gotten the best deal on your new car loan.

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