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Car Loans with Affordable Rates

By: Garry Crystal - Updated: 12 Sep 2012 | comments*Discuss
 
Car Loans With Affordable Rates

Car loans with affordable rates are not too hard to come by if you are willing to invest in some research time. There are a range of different car loans available and car loans are one of the most popular reasons when it comes to borrowing money.

The Right Car Loan

Finding car loans with affordable rates will save money regardless of whether you are buying a new or used car. Buying a car is an expensive business and no one wants to pay high interest rates on their financing. Borrowers should first decide which option will suit them best, and this can be between an independent lender and a loan from the actual car dealer.

Independent Car Loans

There are many different lenders that will offer car loans with affordable rates. This marketplace has grown considerably over the last few years, and with the advent of internet lenders there is now more choice available. Lenders can include banks, internet only lenders and even supermarket loans.

The best option for borrowers is of course to shop around and compare the lowest interest rates available from lenders. This can include zero percent interest rates on car loans, and if you can stick rigidly to the repayments this may be your best option.

Benefits of Independent Car Loans

Independent loans are traditionally a cheaper way of financing car loans. You also have a wider choice of car buying options as you are not limited to the car dealer and their financing options. You can use your independent car loan to buy your vehicle from just about anywhere including used and auction cars.

Independent lenders may also be able to help if you have a bad credit history. The interest rates may be higher and the loan length longer but you may still be able to obtain financing as opposed to loans from car dealers.

Types of Car Loans

There is huge range of car loans available from independent lenders. These can include unsecured or secured car loans, zero interest loans and bad credit car loans. Some lenders will also offer trade in car loans where the borrower is guaranteed a minimum amount of money for their old car depending on the make and model. As always, shopping around and comparing loan offers should provide the best deals on interest rates and trade in deals.

Car Dealer Loans

Car dealers will offer financing on the cars they sell but this will only be for the cars they have and you will not be able to shop around. You can of course shop around from dealer to dealer and find the best car loans with affordable rates. Bear in mind that many car dealers will expect a deposit on the financing and then a large final payment as well.

Also remember that with car dealer loans the dealer will be using a loan company and there may be extra fees and charges to be paid. Having said that, many car dealers do provide zero percent financing options and these may be worth considering.

Hire Purchase Car Loans

Hire purchase car loans are commonly offered from car dealerships and you are basically hiring the car until you have made the final payment. You will usually have to pay a large deposit and if you fail to make repayments the car can be repossessed. Interest rates on hire purchase car loans can be expensive, and if you are looking to keep costs down a car loan may be the better option.

Personal Contract Purchase

This is another car dealership offer whereby the borrower pays a small deposit, then makes monthly repayments and a final large payment before they own the car. The final payment can be as much as a third of the car’s value. The borrower has the option of either making the final payment or walking away from the car altogether. The other option is take out a new personal contract purchase and begin the process all over again.

Car loans with affordable rates can easily be obtained if you have a good credit record and can comfortably afford the repayments. Borrowers should try to find the lowest interest rates possible, and steer clear of companies that charge early repayment fees.

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