Crucial factors to know when applying for car loans.
Thursday, 15 June 2023
Purchasing a car is an exciting milestone, but many people might need to get a car loan first. Applying for car loans can be a complex process in New Zealand. So no matter whether you are a first-time buyer or looking to upgrade your current car, understanding the important factors of car loans is critical. In this blog, we will discuss the must-know things when applying for a car loan, to help you get your dream car more easily!
1. Credit Score
When applying for car financing, knowing your credit score is critical. A credit score is a numerical representation of your creditworthiness that reflects your borrowing and repayment history. Credit score plays an important role during the loan approval process. Because lenders will access your creditworthiness based on your score, which will influence your interest rates and loan terms. So checking your credit score and trying to maintain a good score by paying the bill on time is essential! There are many ways to check your credit score, the easiest one is to come to Kiwi Car Loans. We have a skilled broker team who can not only help you secure car loans but also your credit score report.
Before applying for car finance, evaluating your financial situation and estimating how much you can comfortably afford to borrow is very important. Normally, you should consider these factors: your income, rent or mortgage, expenses, and savings. Making sure you get the ability to pay for the repayment every month is important. If you choose us to help you apply for car loans, our experienced broker will examine your financial status and provide you with the best and most appropriate car finance guidance.
3. Down Payment
A down payment refers to the initial payment made by the buyer when they buy a car with finance. If you have a large down payment, you will get a lower loan amount, monthly payments, and better loan terms. So if you wish to get a lower monthly repayment, saving some money for the down payment is necessary.
4. Loan Term
The loan term refers to the length of time you have to repay the loan, which will impact your repayments and interest costs. So you have to think about it very clearly because shorter terms have higher repayments but lower interest costs. You can use our car loan calculator to figure out how much you’ll have to pay each month.
5. Interest Rates
Interest rates are also an important factor you need to keep in mind since lower interest rates can help you save a lot of money. Also, your credit score will influence your interest rates. So if you have a higher credit score, you will get lower interest rates! If you choose us – Kiwi Car Loans to apply for car finance, we will try our best to help you get lower finance rates and save your money.
6. Hidden Costs
The last important factor you need to notice is hidden costs. These might include car loan application fees, documents fees, insurance fees, and other related costs. You should read the loan agreement very clearly, just in case some hidden costs are added in.
In conclusion, applying for a car loan involves more than just completing the form. We should also consider important factors in the application process. With these must-know things in mind, you are well-equipped to navigate the car loan application process and drive home in your dream car! If you have any other questions about car finance, please feel free to contact us on 0800 008 888.