A Step-by-Step Guide to Financing Your Dream Car with an Auto Loan
Do you have your eye on the car of your dreams but you need a little extra help to get over the finishing line for purchasing it? You are in just the right place. Whether you have found the perfect new or used car, we can help you secure a car loan that works for you and your unique situation.
Financing a car can seem daunting, but with the right information and a trusted finance broker like LendEasy, it doesn’t have to be; in fact, it’s likely a lot easier than you think it will be. In this guide, we’ll walk you through the process of financing your dream car in Australia, ensuring you understand the process from top to bottom.
Financing a Car: A Simple Breakdown
Before we discuss the world of car loans, let’s start with the basics and define what financing a car is. Financing a car means borrowing money from a lender to purchase the vehicle rather than paying the full amount upfront. The car dealership or seller is paid upfront, while the car loan is then repaid over time in monthly repayments with the addition of interest. There are two types of car loans: secured car loans and unsecured loans. If a car loan is secured, often the car itself will be used as collateral; on the other hand, if a loan is unsecured, it will likely have a higher interest rate.
Requirements for Financing a Car
Before you go through the process of looking at different car loans, it’s important to know you have everything in order when it comes to required documentation. We have put together a simple list of requirements for most car loans (both a secured car loan and unsecured loans).
- Proof of Identity: A valid driver’s license or passport.
- Proof of Income: Recent pay slips, bank statements, or tax returns to verify your income.
- Credit History: A credit report to assess your creditworthiness and determine what level of car finance is available to you.
- Employment Details: Information about your current employment and employment history.
- Personal Information: Details such as your address, contact information, and marital status.
How Does Financing a Car Work?
Securing a car loan or personal loan involves several steps. We will outline the basic steps. However, everyone is different, and your financial situation, credit score and history, ongoing expenses, and other personal factors all need to be considered before taking out a car loan. For personalised advice based on your current situation, please don’t hesitate to reach out to a member of our friendly team. When taking out a car loan, it is important to do so with a reputable business; this ensures the longevity and safety of your loan. LendEasy is fully licensed and regulated under an Australian credit licence.
Work out Your Budget
Before you even start looking for a car, it’s a good idea to determine how much you can afford to repay each month. This will give you an idea of how large of a personal loan or car loan you can afford to take out. Now is the time to seriously consider your income, expenses, and any other ongoing financial commitments.
Check Your Credit Score
Your credit score plays an important role in securing a car loan, as it will determine the interest rate that you qualify for. If you have a higher credit score, you will be considered low risk, meaning the lender will believe you will be able to pay off your car loan repayments efficiently. This will help you obtain a lower interest rate. The interest rate that you are eligible for will make a sizeable difference on your monthly repayments, so if your credit score isn’t quite where you want it to be, it is advised to take steps to improve it prior to applying for your car loan.
Get Pre-Approved
Getting pre-approved for a car loan can give you a clear idea of how much you will be able to borrow and the interest rate you might pay. Having pre-approved car financing also makes it easier when you begin shopping around for your car, as you will already have the financing in place ready for when you find your dream car. It also means you can be more sure of a purchase price that will work for you. At LendEasy, we can get you pre-approved fast with no cost or obligation; simply reach out to our friendly and knowledgeable staff.
Compare Lenders
Not all lenders offer the same terms, so keeping your options open is a good idea to get the best car loan for your circumstances. You can compare car loans and the accompanying car loan repayments from different lenders to find the best interest rates and loan terms. LendEasy works with a vast range of lenders, providing you access to exclusive rates and terms you might not find elsewhere. We also make it easier to find the best car loan by allowing you to compare car loans in one central place.
Choose Your Car
Here comes the exciting part! With your financing in place, it’s time to choose your dream car. Whether you’re buying from a car dealership or a private seller, having pre-approved financing can give you leverage to negotiate the purchase price with an understanding of your maximum budget.
Finalise the Loan
Once you’ve chosen your car and submitted your offer, it’s time to finalise the car finance with your lender. This involves completing any necessary paperwork and agreeing to the loan terms, including the loan amount, interest rate, and loan term.
So, that all seems simple enough, right? Remember, if you have any questions along the way our friendly team are more than happy to walk you through any car finance queries.
Benefits of Using LendEasy
Choosing LendEasy as your partner in car financing offers several advantages:
- Exclusive Rates: We work with over 30 lenders to provide you with exclusive rates on car loans unavailable elsewhere.
- Fast Pre-Approvals: Get your car finance pre-approved in less than an hour, with no cost or obligation.
- Credit Score Protection: We protect your credit score by matching you with the best lender the first time.
- Expert Advice: With 17 years of experience, our team offers honest, upfront car finance advice to help you make the best financial decision.
- Convenience: Our easy online application process means you can apply for a car loan from the comfort of your home.
Get in touch!
We hope this article has given you a clear understanding of how to borrow money to purchase your new car. Financing your dream car doesn’t have to be complicated. By understanding the process and working with a trusted finance broker like LendEasy, you can secure the best car loan to suit your needs.
We allow you to compare dealer finance and understand your monthly payments all in one place, streamlining the auto loan process and allowing you to find lower interest rates for your car loan. Whether you’re buying a new or used car, our team is here to help you every step of the way. Visit our Car Loans page to learn more and start your application today.
