Buy a new or used car with car finance
So, you’ve decided to buy a new car. Whether it’s a practical run-around for school drop-offs and quick trips to the mall, or a powerhouse SUV for those weekend adventures with your mates, you will need to raise the necessary money. Luckily, if you don’t have enough cash on hand, or don’t want to part with any on your next car, there are various finance options available; let’s look at the car finance solution.
What is a car loan?
A car loans allows you to borrow money to purchase a vehicle from a financial institution or authorised lender. This lets you take possession of the car now, but pay it off in monthly premiums over a fixed period.
How much can I apply for?
This depends on your income. The lender will require proof of income and will work out what you qualify for. There is no fixed amount; each case will be looked at individually according to the lender’s criteria and your personal financial circumstances. Work out what you think you can afford, using this car loan repayment calculator, and then speak to your lender.
What do you need to get a loan for a car?
There is some red tape and hoops to jump through, but the process is relatively simple, and once you’ve read this article, you’ll know all you need to get your car loan.
It’s always good to get a head start. The sooner you jump through the hoops, the sooner you’ll be able to drive off in your new wheels.
What you need
1. Recent payslips
Any lender will require you to produce proof of income. Print out a couple of pay slips or email the digital copies to your broker.
2. Your financial situation
You will need to produce three months of bank statements to provide the lender with the peace of mind that you can comfortably pay off your car loan.
3. Personal ID
The relevant officials like you to prove that you are who you say you are. A passport, driver’s license or any other officially recognised means of identification (birth certificate) will do.
4. Car insurance
If you are taking a secured car loan, whereby the lender uses your car or other assets as collateral against your loan, you will need to produce your 12-month car insurance policy document.
5. Tax invoice for your car
Once again, this is just for secured car loans.
What’s the difference between car finance and a personal loan?
There isn’t much difference between the two. A personal loan allows you to borrow a specific amount for your personal use like renovations, a holiday or a boat, whereas a car loan only allows you to purchase a car.
Car finance approval process
- Speak to your lender and get an application form
- Fill in the form as accurately as possible
- Hand in form with all required documentation
- Lender does verifications and checks
- Answer can be one of three:
• The lender needs more information or clarification before deciding
Contact your car loan specialists and take that first step to getting your new wheels.