For those who don’t have the necessary finances to buy a car outright, car loans are a sensible and affordable way to buy the car of your dreams.
Calculating your car loan repayments, before looking at the loan options available, will help you determine the best car loan for your needs.
Know your financial situation
Before calculating your car loan repayments, it is a good idea to first gain an understanding of what your financial situation is.
When applying for a car loan, you want to make sure your repayments are achievable for you. Don’t commit to repayments that could put you in financial hardship.
Make sure to consider various factors, such as a sudden job loss, or an unexpected bill then ask yourself again, if you’d still be able to afford the repayments.
It’s important to have a good understanding of your financial situation to budget for car loan repayments before you apply for one.
Short-term vs long-term car loans
There are numerous car loan options available, but it’s important to find the one best suited to your individual needs.
Short-term car loans will require you to make repayments over a shorter period. This often means the repayments will be a larger amount in comparison to long-term loans that may allow you to make smaller repayments over a longer loan period.
Which type of car loan you choose is going to depend on your financial situation and what you can reasonably afford to repay each week, fortnight or month.
Consider interest rates
When calculating car loan repayments, it’s important to consider the interest rates included with the loan.
Interest rates will differ across different car loans, and will affect the overall amount of your repayment costs.
Most car loans charge a fixed interest rate on the amount you’ve borrowed. Interest rates will be an additional cost you pay on top of your regular repayment amount, so make sure this is included when calculating your car loan repayments to get the most accurate amount.
Online repayment calculators
Many online car loan websites have calculators to help you determine what your monthly repayments will be. They can be a good place to start when looking to purchase a car through financing.
With many car loan options available, using an online calculator can help you narrow down your options.
Car loan calculators can provide you with a guide as to how much you may be able to borrow or what your repayments might be in weekly, fortnightly or monthly instalments. This may help you determine whether you should apply for a short or long-term loan.
A car loan calculator may also be used to help you determine the amount you could borrow based on your finances and whatever repayment amount you feel comfortable with.
A car loan repayment calculator will show you the lowest current car finance rates available and may show you where you can save.
Repayment calculators should be used as a guide only, as they do not take into account your personal lending profile, circumstances or asset type, and so may not be an exact representation of the car loan you end up with.
Something to keep in mind when using any car loan calculator, is that asset finance (including cars, SUV’s and light commercial vehicles) is largely a ‘risk-based’ lending system. This means the rate you are offered will depend on numerous factors, such as your lending profile, circumstances and the asset you are looking to purchase.
Everyone’s situation is different, therefore the car loan interest rate you are offered can vary.
Work with finance specialists
Working with finance specialists is a quick and easy way to calculate your car loan repayments.
Finance specialists work to understand individual circumstances and budget, and then use their knowledge of car finance, as well as the criteria generally required by lenders, to help you find car financing options that best suit your needs.
When trying to find the best car loan rates, finance specialists will be able to help you find what is available for you.
Whether you need a car for private use or a business car loan, it’s important to know what your repayments will be before applying for a loan, to ensure you can comfortably afford it.
If you want to receive professional advice on calculating your car loan repayments and finding the best car loan for your needs, contact the team at 360 Finance to talk with a finance specialist.