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What factors affect the car loan I get?

Factors affecting the car loansr

There are a number of factors that can affect the car loan you end up with, such as the age of your car, your credit rating, and whether you choose a fixed or variable rate loan, or a secured or unsecured loan. Understanding what those factors are and how they affect your loan can help you to make the right decision when comparing loans.

Whether you buy a new or used car

New car loans, as you would expect, are designed to finance the purchase of new cars. However, new car loans don’t just cover brand new cars, they can cover cars up to two years old, with a certain number of kilometres on the clock.

Used car loans are designed to finance the purchase of used cars, usually for cars aged between two and five years. Used car loans are available for cars more than five years old, but various stipulations may apply.

New car loans usually attract lower rates of interest than used car loans, as they are considered lower risk. If the borrower is not able to pay back the loan for whatever reason, the lender is more likely to be able to sell the car and make its money back on the unpaid loan if the car is newer.

Whether you choose a secured or unsecured loan

Secured and unsecured car loans also attract different interest rates. Lenders offering secured loans have the car as collateral, so if the lender is unable to repay the loan, the lender can sell the car to make back its losses.

An unsecured loan doesn’t have that kind of security, which is why secured loans are usually easier to get approved for, and generally offer lower interest rates.

Whether you choose a fixed rate or variable loan

With a fixed rate car finance, the interest you pay is fixed for the length of the loan. That means your repayments will always remain the same, making it easier to budget. With a variable rate car loan, the interest varies according to the lender. This can allow you to save money on interest if rates fall, but it means you will pay more if rates increase.

Whether you choose dealer finance

Many car buyers choose dealer finance because it’s the easy option. With dealer finance on the table, some car buyers choose to take it up because comparing and finding other car loan options is too much hassle.

However, dealer finance is not always that competitive. Some dealers add commission to their finance, which means borrowers pay more than they would elsewhere. If you want to get the best deal on your car finance, always compare all your options before you sign.

Your credit rating

One of the most important factors affecting your loan is your credit rating. When you apply for a car loan, the lender will usually check your credit file to assess the risk of lending to you. If your credit history is good, with no missed payments or defaults, the lender will be more likely to approve your loan and offer you lower interest rates.

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Lend Me – Car Loans Perth, Western Australia

How we've helped our clients...

"Starting up a new business isn’t easy, with so many things to think about it can be quite a stressful process. With the services of Lend Me Asset Finance and Locate Me, they have really helped to take this stress away in the way of meeting me on my job sites to sign documents and dealing directly with the Car Dealers, Bobcat Dealers and even my accountant.

The guys at Lend Me really do take the time to listen to what you are after and work in to suit you and make the transaction so simple and convenient, I can’t thank them enough! I’ve also recommended their services to 3 friends already and have only had good feedback. Lend Me have certainly gained a client for life! Reece"

"Hi there, Saturday just gone, I picked up my dream car, a 2013 black lancer LX.

I'd like to take this chance to say Lend Me Car Loan customer service was by the far the best I have ever received. What I thought was going to be tough work turned out to be the opposite. The process easy, simple and quick for me, she did the hard yards... I will be recommending friends and family... Thanks again! Regards, Stephanie"

I just wanted to say thank you... This has been the smoothest process. You and the other girls I dealt with at Lend Me Home Loans were so friendly and so efficient with everything, I felt like I was the only customer you were dealing with.

I will definitely be raving on to loads of people about Lend Me and the great service you provide.

I am stoked, this will take so much pressure off and will seriously change our lives... we can actually get ahead on payments and start saving some more money.

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"Emily & I just want to take this opportunity to say a very big thank you for seeing us through our first home purchase and home loan, you have been a massive help not to mention getting us out of a sticky situation. We will definitely be in touch in the near future and will refer/recommend you to our family & friends if looking out for a friendly, helpful and reliable mortgage broker.

Take care and speak soon. Matt & Emily" 

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