Unlike some other car finance options, a car loan will allow you to keep your car once you’ve paid it off in full. Usually, a car loan is an unsecured personal loan. This means that the loan isn’t secured against your property. Instead, the lender will let you borrow money to buy a new car, and you’ll pay it back (with interest) in monthly instalments over the loan term.
As with any big financial decision, you’ll want to be thorough with your research before deciding which car finance option is right for you. Running a car loan comparison is a good place to start. From there, you’ll be able to see the best car finance deals available to you.
First, ensure you can afford the monthly repayments for the entire loan term. If you miss repayments or default on your loan, it can negatively affect your credit score and your chances of getting a loan, credit card or mortgage in the future.
You’ll also want to make sure you’re comfortable with the APR (Annual Percentage Rate). Not everyone will receive the Representative APR, so make sure you take note of the APR you’re being offered. The lower the APR, the better.
Finally, make sure you’re aware of any additional costs, fees and terms that come with your car loan offer.