Unless you will be paying full for the car you are considering of buying, you will surely need a car loan. However, with plenty of competing auto loan products in the market today, how will you choose the best? Well, experts have indeed provides some tips so you can get the best auto loan.
Things To Consider Before Making Your Final Choice
Interest rates for every car loan product – Basically, there are 2 types of interest rates applied for car loans. First is the fixed interest rate wherein rates are calculated every month depending on the total amount the client borrowed. Second is the reducing balance interest rate wherein rates are computed monthly basing it from the amount the client currently owes the bank. In some other banks, profit rate usually is computed by dividing the markup profit by the purchase cost.
Payment plan in every loan product – It is very crucial for a possible borrower to evaluate such payment plan as this allows the borrower to plan financially during the duration of the loan. In some countries, the maximum period for a loan is fixed at 6 years. There are also other banks offering borrowers the option to pay lesser amounts monthly and settle the remainder in bulk.
Inquire about the processing fees up front – As a possible borrower, it is very crucial for you to ask about such so that you will be aware of all of the cost associated with the car loan. Lots of banks indeed allow borrowers to extend the duration of the loan. But in case you want to settle your loan as soon as possible, ask if you must pay an early settlement fee.
Necessary documents that must be submitted – Potential borrowers are oftentimes required to submit salary certificates, copies of their passports, and banks statements. Some banks might even require them to submit at least 3 local references with or without a copy of a utility bill. Be reminded that documentation as well as vetting requirements varies from one bank to the other. If you have all of these documents and requirements at hand, your loan application might become a lot easier and faster.
Perks included in the loan product – To entice as many potential borrowers as possible, there are lots of banks that offer added benefits – from credit and debit cards to free registration and extended warranties. Although some of these bundled offers might seem very appealing to you, be cautious about the possible added costs attached to it.
These tips will certainly help you get the credit card suitable for your needs.