An online car loan offers quick approval of up to R500,000 at an affordable low interest rate from 16.95% and a convenient repayment period of up to 5 years – driving a car has never been easier.
Car finance that understands your needs
Whether you’re looking for the most budget-friendly vehicle financing option or the one that will cost you the least over the life of the loan, these lenders are there for you.
I’m ready to buy a car, but first I need to qualify for vehicle finance
In South Africa, you have a wide variety of auto finance to choose from – almost as many as vehicle brands and dealerships! When it comes to financing your vehicle, the options are endless and it can often be overwhelming. So it is a good idea to start with monthly payback how much you can afford and start taking from there.
If you intend to use a car loan to finance the purchase of your vehicle, you should understand what options are available to you and what the pros and cons of each option are.
Plan and prepare your car finance application
The most effective strategy is to plan and prepare everything in advance. You should be fully prepared for your car finance application before you even go out and test vehicles.
Preparing will help save you time and money, and potentially ensure that you can buy the car you want.
1) Increase your credit score
The first thing you need to do is get a copy of your credit report. You have the right to receive a free credit report every year. So do not hesitate to take this opportunity. Read the information carefully and watch out for errors and fraudulent activity.
If you find any, get them fixed immediately. If you encounter any shortcomings such as late or missed payments, you should do everything possible to resolve the situation. All of these efforts will help improve your credit score so that you can get a lower interest rate on all forms of credit.
2) Calculate the affordability to buy a car
The most important thing you have to decide is how much you are willing to spend on a car in total and monthly. You need to determine your budget or set a fixed budget for purchasing the vehicle to make sure you don’t overdo yourself.
You should have a clear idea of what down payment you will be able to make based on the savings available. Then you need to calculate what part of your monthly income will be used to repay the loan. Use the car finance calculator to work out how much credit you need.
3) Common Mistakes Car Buyers Make
You should pay attention to the emotional element that comes with buying a car. If you are completely overwhelmed by a vehicle but are way over budget, the dealer may be trying to come up with an offer that seems affordable but is actually expensive.
One of the main tricks traders use is to offer a larger amount of credit over a longer term. This makes the monthly payments smaller, but since the interest is charged over a longer period of time, the loan becomes very expensive. Caution should also be exercised with flipped loans and secured short-term loans. The vehicle depreciates faster than the outstanding credit balance decreases
4) Calculate the interest on your car financing
What appears how much now can turn out to be a costly mistake in the years to come. That’s why you should plan ahead. You need to accurately calculate the total loan amount based on the down payment and the term of the loan.
It is certainly easier to make a smaller down payment and take out a larger loan now. However, the higher nominal amount makes the loan more expensive. This way, you may end up owing more than its real value due to the high depreciation rate on new vehicles.
You should use a loan calculation tool such as a spreadsheet or loan calculator to find out exactly what you are paying in interest and what you are paying on the principal each month. This gives you an idea of how much equity your vehicle will generate over time.
5) Consider taking out insurance to save on your car finance
If you have life insurance or disability insurance, you can get a lower interest rate on vehicle finance. Because lenders take into account the risk that you will not be able to repay your loan due to death or disability.
If you have insurance, you can use it to pay off your debts. This lowers the risk for the lender and results in lower interest rates. Most lenders don’t require you to have insurance, but having it covered is very helpful.
6) Compare Vehicle Finance Quotes
Car loans in South Africa are not only available from auto dealers, but also from banks, asset finance houses, online lenders and peer-to-peer lending platforms. The more options you compare, the more likely you will find the best deal. When comparing car loans offered by different lenders, you should pay attention to the interest rate, fees, monthly payments, and the total cost of the loan.
By comparing different auto and personal loans and offers, you can better understand the current market. You can use this information as a powerful tool for negotiating with traders.
7) Pay back your car finance sooner
You want your car loan to have a flexible repayment structure so that you can pay it off faster when you have the funds. You should be able to make additional payments without incurring additional fees. You should also look out for prepayment penalties. If you have poor credit, you may still be able to apply for a bad credit loan from a blacklisted lender.
Read the terms and conditions of the loan very carefully, as such fees are usually not simply explained by merchants and financial service providers in your online loan application. Follow these steps to get to know each other and, ideally, get one of the best car loans in South Africa without undue stress and hassle!