Finding the right car loan can be tricky. Sometimes just knowing the right questions to ask can make all the difference. We've come up with 10 key questions for you to ask to help you compare loans and find the right one for you.
The 10 questions to help you compare car loans
A fixed interest rate means the repayments stay the same for the term of your loan. A variable rate means the repayments will change with a rate change.
To choose what suits you best, consider your budget, current interest rates and whether you would be able to handle increased repayments on a variable loan, if the interest rate was to rise.
RAC Finance offer fixed rate car loans which means your interest rate and repayments will stay the same for the term of the loan.
The term of the loan is the length of time the loan is in place and repayments are being made. Make sure you look closely at your repayments, rather than the term, and decide if the repayments suit your budget.
RAC Finance offer loan terms between 3 - 7 years.
Your interest rate is the fee that you are charged for borrowing money. This is usually expressed as a percentage of the total loan amount.
A good indication of the total loan cost is to look at the loan comparison rate which also takes the loan fees and charges into account to provide a comparison against other financiers. Whilst seeking out a low interest rate is important, don’t forget to check those fees to understand the full cost of the loan.
An establishment fee is a one-off cost for setting up the loan. These fees can vary significantly depending on which loan you choose.
With an RAC Finance car loan the establishment fee is $349.
Loans often incur a monthly account-keeping fee. The amount differs considerably depending on the loan and financier and can really add up over the term of the loan.
A monthly fee of $10 over five years would cost $600. There are no monthly fees or ongoing account keeping fees with an RAC Finance car loan.
Many loans charge ongoing fees for direct debits and providing statements. Make sure you find out the details, as they can really add up over the term of the loan.
There are no monthly fees or ongoing account-keeping fees with an RAC Finance car loan.
If you pay out your loan early, is there a fee? Check your terms and conditions as financiers have varying penalties.
RAC charges a fee of $400 if the loan is paid out in the first 2 years.*