Applying for an Online Loan

With the provision of online loans applying for finance through Yes Loans has never been easier.

When applying for a new or used car loan you need to decide on a payment that is easily affordable. At Yes Loans, we are committed to giving you access to online loans that are cost effective and simple to obtain, subject to the lenders credit criteria.

Once you have done your budget and worked out what you can afford to pay on your car loan, you can start looking for cars that fit with in your budget. A good idea is to also arrange your car loan before you go looking. Getting a pre-approval for your car finance allows you to choose a new or used car within your budget.

  • You won’t overspend when choosing your car, boat, caravan or motorbike,
  • You’ll be in a better position to negotiate a good deal,
  • You’ll go in knowing your repayments and what you can afford.

How to Apply for an Online Loan

You can apply online, over the phone or in person. Either way you will need to supply some personal and financial information to the broker or lender. They will able to give you an idea on whether your loan will be successful subject to confirmation of the details you have provided. Providing that information should only take 10 to 15 minutes and in most cases can be done online.

What Type of Loan You’ll Need

For personal use the most popular loan is a secured loan where the car or the motor vehicle is used as security for the loan. This method is the most common way of financing a car as the interest rate for a secured loan is usually at a lower rate than an unsecured loan.

A secured loan allows the lender to take security over the car or goods until the loan is paid off. The loan can usually be paid weekly, fortnightly or monthly. You may have a loan that has a balloon payment or residual. This means that is a large sum outstanding at the end of your loan. This is a deferred payment or final payment that is due at the end of the loan. This can result in lower regular payments, but on the down side will result in a higher amount of interest on the outstanding balance. You also have a large final payment to make if you wish to own the car.

If the car loan is for business use you can choose to Lease, Hire Purchase or use a Chattel Mortgage to purchase the car. We discuss these options under business loans.

How Long Can My Repayments Be?

Car loans and unsecured personal loans vary between one and seven years. Paying off a car loan over one year will mean the repayments will be high and the interest expense lower. A loan or car finance over seven years the repayments will be lower but the interest amount higher. Ask if your loan has repayments that are flexible so you can pay extra if you wish to. Some finance and personal loan companies will let you have a payment holiday if your repayments are in advance.

Interest Rates

The interest rate you are offered will depend upon whether the loan is secured or unsecured and your personal credit worthiness. The better your credit or the greater your ability to repay the loan, the chances are that you will be able to get a lower interest rate. This is a good reason to get a pre- approval for your car loan before deciding on the car you wish to buy. You may be offered a loan by the dealer at a higher rate than you could get having a car loan broker like www.yesloans.com.au arrange your loan.

Some lenders will be able to offer you a fixed interest or a variable interest rate. You should consider the length of the loan term and the interest rate environment before deciding. Both options have their benefits and pitfalls. Lenders and brokers will quote an interest rate and a comparison interest rate.

The comparison interest rate takes into account an example of a similar loan and factors in the various fees that are payable.

You should not only compare the comparison rate but also the loan features as well. The repayments for a loan with a lower interest rate may actually be more than a comparable loan with a higher interest rate but lower ongoing fees.

Online Loans – Fees and Charges

Loan and finance companies and brokers can charge a range of fees. You should always check your credit contract with will outline all fees and charges.

Establishment Fee

Lenders will sometimes charge a fee to establish the loan which is usually added to the loan amount.

Origination Fee

Most dealers and brokers will charge an origination fee. This is a brokerage or dealership charge.

Ongoing Fees

Some lenders will charge a monthly or fortnightly fee called an account keeping fee.

Early Exit Fees

Some lenders will charge you a fee to exit or finish a loan early. You should always ask what the exit fee is and how it is calculated. The longer the loan runs the less the early termination fee will be.

Late Payment Penalties

Most lenders will charge you a late fee if you do not pay on time.

Documents You Will Need to Provide:

Identity: usually a current driver’s license and a medicare card or credit or debit card.

Proof of residence: a phone bill or bank statement with your current address. A power or water bill could also be used.

Confirmation of income: This is done with a pay slip.

Assets and liabilities: details of what you own and what you owe.

Individual lender requirements will vary

Statements:

  • Bank or savings accounts
  • Managed funds
  • Term deposits (if applicable)

Statements from:

  • Credit cards
  • Personal loans
  • Mortgage

If you prepare and gather all of these documents prior to making your loan application you will be able to speed up the process.