Purchasing a car will not only give you transportation and greater freedom, it is an opportunity to invest in an asset and build your credit rating if you take out a loan. Choosing car finance brokers to help you secure the loan you need means you can get the best possible deal, securing a rate or loan option that may not have been available to you if you had applied directly to a bank or lender on your own.
Understanding Car Finance
A car loan can be a great option if you are buying your first vehicle or you are upgrading to a newer car. When borrowing to buy a car there are generally two types of loans, secured and unsecured. A secured loan is one that is lent against the value of the car. This type of loan is limited based upon the value of the vehicle being purchased, as well as regular loan restrictions such as income, repayment ability and so on.
The other type of car loan is an unsecured loan or personal loan. This option requires demonstrating your ability to repay the loan and a good credit history, but the actual car is not listed as a particular security against which the money is lent to the borrower. Different rates of interest are offered based upon the type of loan taken out – and there is often the opportunity to select between variable or fixed interest rate when securing a loan.
The Benefit of Using a Broker
There are a number of benefits to using a broker. Firstly, the broker can give access to deals that you might not be able to take advantage of if you apply directly to the bank or lender. As a professional with an established relationship and network of contacts within the finance industry, the broker can help you to secure the most suitable loan for your particular situation. Secondly, a broker may be useful if you need someone to help you with securing a loan if you have unusual circumstances that might make it difficult if you applied directly to a lender. This could mean someone who is self-employed, has a bad credit history or has previously defaulted on a loan.
Hints for Finding a Broker
Choosing car finance brokers should be about finding someone that is able to help you secure a loan and someone who understands your particular financial circumstances. The broker can then make contact with lenders on your behalf to help you find someone who is willing to lend you money to purchase your new vehicle. You may also find it useful to do some due diligence and find a broker with a stable background and solid reputation, as you may need to divulge some of your personal financial information to the broker in the course of the loan process.
By choosing car finance brokers to establish your vehicle loan, you can access some great rates, receive assistance in securing a loan if you have been turned down in the past and obtain finance for a vehicle if you have unusual financial circumstances.