What is new car loan?
If you’re looking to buy a new car but you don’t have the available cash for the entire amount of the purchase price, you should think about a new car loan.
A new car loan is a type of personal loan which will help you to fund the purchase of a new car. New car loans are typically secured against the car you buy.
This means the lender can repossess the car if you default on the loan. But this also means that the loan is less risky for the lender, so new car loans typically have lower interest rates.
What are the benefits of a new car loan?
Generally, you’ll enjoy lower interest rates when you choose to get a new car loan, compared with other car loan types.
This is because a new car loan is usually seen as a lower risk to the lender as a new car has a higher resale value – in the case that you are unable to pay back the loan and the lender repossesses the vehicle.
What are the interest rates for a new car loan?
At Positive Lending Solutions, we’ll always be looking for the best interest rates for you with your new car loan. We’ll need to know about your financial history and your credit score before we can approach lenders and find out what interest rates will be possible for your new car loan.
Interest rates for a new car loan will vary between lenders so it’s hard to give a fixed idea of what you can expect to pay. However, once we’ve spoken to you, we’ll have a much better idea of how much you can expect to pay and we’ll get you the lowest interest rate we can.
Before you start the process, it’s good to understand the different types of new car loans and how the interest can vary between each one:
1. Variable
As the name suggests, interest rates for variable rate car loans go up and down depending on how the market changes – which will change your repayment amount.’
2. Fixed
Fixed rate car loans have a fixed interest rate for the entire term of the loan – this means that you’ll always be paying back the same amount each month so you’ll know exactly where you stand.
3. Secured
A secured car loan means that the new car you are buying will act as security for your loan. This is a lower risk for the lender as they’ll be able to repossess your vehicle and sell it in case you default on the loan. Secured new car loans generally offer better interest rates for this reason.
4. Unsecured
An unsecured car loan means that the lender will offer the new car loan to you without any security. They’ll approve you for the loan by looking at your previous financial history and your previous ability to make repayments.
Where can you get a new car loan?
Although it’s possible to search for hours online for a new car loan that suits you, you’ll save huge amounts of time, money and unnecessary stress by contacting us and letting us help you to find the best new car loan for you.
We not only have decades of experience helping people to find car loans that suit their needs, but we also have access to a wide range of lenders who we can put you in contact with to work through the process.
The process of getting a new car loan
Firstly you’ll need to know the new car that you want to buy. Once you’ve decided on this, you can do some sums and work out exactly what you need to borrow and how much you can pay back each month. It’s really important that you don’t stretch yourself financially as this could result in you defaulting or missing repayments.
You can apply for a loan with us and it takes just minutes to fill in our online quote form. You’ll need to have all your documentation ready before you get pre-approval. You’ll need to have documents such as proof of income, address, and bank details ready for us when required.
Comparing lenders
This is something that can be tricky to do – especially if you’re doing it online. Most people like to go with personal recommendations, although these can be hard if you have different circumstances to your friends and family.
We can help you to compare lenders instead. We have access to a huge range of lenders alongside our decades of experience within the industry. This will give you the peace of mind that you’ll be going with the right lender for you.
Key terms for new car loans
There are quite a few key terms when it comes to getting a car loan – here are a few which are helpful to be aware of. Always ask your lender if you’re unsure of any of the jargon being used –they should always take the time to explain it to you fully.
- Loan term: this is the amount of time that a lender will give you to repay your new car loan. Generally, it’ll be a maximum of 5 years but it could be slightly longer.
- Advertised rate: this is the interest rate that is advertised – you need to be aware that sometimes this doesn’t include fees and charges so always double-check.
- Comparison rate: this is the interest rate that combines the advertised rate with the fees and charges for the loan
- Borrowing capacity: this is the total amount of money you can borrow from a lender. Your borrowing capacity is based on a number of factors and can vary between lenders.
- Pre-approval: this is a document, which shows the amount of credit a lender will give you towards the new car.
Apply for a new car loan today
If you’re ready to get started with a car loan for your new car, we’re ready to help. Our team can help you understand all your options and the full process involved.
Discover how we can help you get the best car loan for you.
