Top 6 tips for financing your next purchase
You’ve picked your vehicle and now you have to pay for it. Trying to battle the finance minefield can be an absolute nightmare but apart from having your finances in order there are some common mistakes you can avoid when it comes to your loan.
Don’t go shopping for finance
By all means be well prepared and research your options but don’t apply for loans left, right and centre. Your credit report will have more holes than a road sign out bush. Wait until you know who you’re going with before submitting an application, which will give you the best chance of approval.
Get a copy of your credit report
No-one likes a nasty surprise and it pays to be prepared. Get a free copy of your credit report and know what’s on there; and if something is there that shouldn’t be then get it fixed. Banks like squeaky-clean applicants but it’s not the end of the world if you do have a mark on your file – there are lenders out there for you, too… but be prepared to pay…
Don’t get lured in by the fancy low interest rate
Read the fine print or find out what the comparison rate is (it’s the interest rate when the fees and charges are included and gives you a better idea of what that the rate is that you’re actually paying). Some finance companies like to lure you in with a fantastic low rate or special honeymoon period; then when the honeymoon is over you’re left out in the cold paying more than you should be.
Know what you can afford
You may want a HiLux but have the budget for a Great Wall. Calculate what you can afford each month on loan repayments, add a buffer, then use a repayment calculator to show you what kind of loan amount those repayments would go towards.
Round up and save
Whatever your loan repayment is, round it up to the nearest hundred. Not only do the extra repayments save you in interest charges but you’ll pay the loan off quicker too (just make sure there’s no early repayment penalties). Think of all the extra accessories you’ll be able to buy!
Insure your vehicle
Imagine this: You think ‘she’ll be right’ and she wasn’t and you’ve now written off your vehicle. You’ve still got money owing but nothing to go with it. There’s no fun in that. Make sure you’re comprehensively insured and covered for doing what you love doing.