4 Important Things You Must Know Before Getting a Car Loan
There are few greater pleasures than driving your brand new car home for the first time. But paying for the said car may not always be as pleasing. Unless you have bags of cash hidden under the bed, you will probably need a car loan to pay for that very big ticket purchase. These are four things you should know before getting a car loan.
Easy monthly repayments – The main merit of taking out a car loan is the ease of small monthly repayments. Paying for a car upfront, and in full is difficult, especially for young professionals with little savings. Even if the cash is on hand, it may make more sense to use it for something else, rather than to commit one’s entire savings into buying a car. Why pay for everything upfront when you could more comfortably repay in over a number of years?
Of course, one would be wise to check interest rates. Upon closer inspection, you may be paying an obscene amount of interest over the loan tenure even though (or especially because) your monthly repayments are very small. You may consider shortening the loan term in order to mitigate interest charges. A loan amortisation calculator can help you determine how much of the borrowed principal you are repaying every month.
Leverage – Using a car loan to pay for a car means employing leverage. Leverage means using other people’s resources to achieve your goal (or to buy a car in this case). Even with the cash amount in hand to make an upfront payment on a brand new car, getting a car loan instead might be more beneficial in the long run. You can invest the cash in hand instead of using the entire amount to pay for a car. That way, you can earn money on your investment, while driving your brand new car at the expense of the lending bank (until you repay them in full of course!)
Coverage – Adequate insurance coverage needs to be considered when getting a car. nsurance helps you ensure that you are covered in the event that your car is damaged in an accident, stolen or destroyed.
Promotions – There are numerous car loan promotions available today. While shopping is usually a past time favoured only among women, it is best that you – man OR woman – take the same approach when looking for a car loan. Find a good lending institution. Take some effort to find one that will give you good interest rates and favourable terms. While you’re at it, use a comparison website such as iMoney to help you find the cheapest car loan in the Philippines.
Getting a car can be troublesome, but it can make paying for your vehicle more manageable over the long run.
Find out which bank is offering the best car loan in the Philippines today!