What is a Car Loan? This is a secured personal loan used specifically to buy a new or used car or any other type of vehicle. Some lenders will provide you with an unsecured loan to buy a car, meaning you will get the cash loan which you would use to buy a car.
How do these two types of loans compare? A secured personal loan will have lower interest rates but you are required to take full comprehensive insurance on the vehicle before the loan is approved. With an unsecured loan the interest rate will be 2% – 3% higher than the interest rate for a secured personal loan, but you don’t need to take full comprehensive insurance on your car.
The interest rate can be variable or fixed. In general, if you think you will repay your loan before the end of your contract, you should take a variable interest rate. If you would like to have lower monthly payments then you should opt for a fixed interest rate. Other fees and charges include an establishment (application) fee which can range from $50 to $250. Also some lenders will have a monthly fees for the duration of your car loan contract.
If you pay out your loan before the end of the loan contract you may also have to pay an early repayment fee. This fee will vary from one lender to another. You should also enquire if there are any missed payment fees, meaning each time you are late with your monthly payment you may be penalised with an additional fee.
Depending on the intended car use (ie. business, personal use, etc), car loans can be categorized as:
More to consider when looking for car finance
To obtain a car loan you may approach a lender directly such as banks, credit unions, building societies and private lenders. Many car yards offer car loans as well. You may also wish to contact a broker who will shop around for you and look for the best car loan available.
When looking for a car loan you should consider the following:
Can car loans be pre-approved?
Are there application fees for car loans?
Are there ongoing monthly or annual fees?
What is the interest rate?
Is there a choice of fixed and variable interest rates?
Can I make extra repayments or lump sum repayments?
Is there an early repayment penalty?
Are there missed payment penalties?
BMW Car Finance
German automaker BMW is known for her luxury and good performance vehicles. The cars are manufactured in a variety of models ranging from saloons to SUV’s to suit the needs of most of the users. BMW’s are also quite pricey, and most customers cannot afford the entire one-off cost required to buy them. Fortunately, BMW Car Finance Stratton plans enable users to own the cars and pay for them in bits.
Depending on your financial situation, there are several types of BMW car finance plans. A secured loan allows you to borrow money from a lender while using the BMW as collateral. On the other hand, an unsecured loan provides funds to buy the BMW without any guarantee. One crucial difference between the two credits is the high-interest rate imposed on the unsecured loan.
Dealer financing is also a common BMW car finance option. A car dealer allows you to own your preferred BMW and make periodic payments. At the end of the repayment period, you are required to pay a lump sum payment to finalize the deal.
BMW car finance for leases allows customers to borrow funds to hire a BMW for a fixed period. There are two types of contracts depending on your financier. A novated lease can be provided your employer where the lease payments are made directly from your pre-tax income. An ordinary car lease is granted by a financier who already owns a BMW and leases it to you while you make monthly payments. Some people choose to buy the BMW at the end of the lease.
Reputable institutions that offer BMW car finance in Australia include Stratton Finance and Bank of Melbourne. Stratton Finance provides financing worth $18,000 minimum at 6.62 percent per annum for up to 10 years. The loan features monthly repayment of $927, an application fee of $499 and $7 as monthly service charge. Bank of Melbourne offers a secured loan of up to $80,000 at 9.6 percent per annum with $ 965 monthly repayments. Borrowers also have to pay an application fee of $195 and a monthly service charge of $12. Other BMW car finance providers worth trying include Latitude, IMB, Beyond Bank and RACV.
Choosing the best BMW car finance service provider is never an easy task. Depending on your financial status, some of the factors to consider while comparing the options available include the loan amount, term, interest rate, fees, and repayment schedule. The ideal service provider should offer a BMW car finance option that does not severely affect your bank account during the repayment period.
Options For BMW Car Financing
1. Lattitude Financial Services
Lattitude Financial Services offers BMW car finance that features interest rates as low as 6.99%. If you get a loan from Lattitude Financial Services, you will have to pay an upfront fee of $295. There also is a $594 repayment fee.
Westpac offers fixed rate BMW car finance loans starting at 8.49%. The upfront fee is 250 dollars. The monthly repayment fee is 615 dollars. The loans range in size from 10,000 dollars to 100,000 dollars.
This lender is exclusively designed for residents of Australia. BMW car finance loans from 5,000 to 100,000 dollars are available. There is a 400 dollar upfront fee for anyone who wants to use the service. The monthly repayment fee is 572 dollars.
4. Beyond Bank:
Beyond Bank offers BMW car financing loans. The upfront fee for these loans is $175, and the monthly repayment fee is 576 dollars.
5. iMB Bank:
This bank offers loans for new cars. You can borrow anywhere from 2,000 to 75,000 dollars. The monthly repayment rate is 580 dollars. The upfront fee is 250 dollars. The loans feature a comparison rate 6.34%, and the interest rate is 5.99%.
Harmoney offers BMW Car Finance Stratton and their interest rate is 6.99%. The comparison rate is 7.69%, and the monthly repayment rate is $594. Harmoney also offers 3 year BMW car financing, and these loans feature the same interest rate. You can borrow between 5,000 dollars and 70,000 dollars.
HSBC offers fixed rate personal loans that can be used as BMW Car Finance. However, the interest rate is 9.50%. The monthly comparison rate is 10.06%. You can borrow between 5,000 and 50,000 dollars from the company. The monthly repayment fee is 630 dollars, and the upfront fee is 150 dollars.
8. RACQ Bank:
This bank’s loans are perfect for anyone who is buying a used BMW. The interest rates start at 9.52%, and the upfront fee is 395 dollars. The monthly repayment fee is 652 dollars. You can borrow between 3,000 and 60,000 dollars from the company.
9. Hunter United:
Hunter United offers a variety of loans with terms that are less than 5 years. The interest rates start at 6.99%. You can borrow between 10,000 and 100,000 dollars from the company.
What is a Novated Lease for Cars?
Even though you might have heard of car leases before, one thing that you might not have ever heard of is a novated lease. However, if you have not yet heard of this type of car lease, you could be missing out on an opportunity that will work out really well for you.
A novated lease is designed to be a part of the salary and benefits package that is offered by an employer. In addition to your salary, your employer will agree to pay lease payments for you for a vehicle of your choice. This will be taken out of your pre-tax salary, and you may take a pay cut because of it. However, the vehicle will be there for you to use for your personal use, so you will not have to worry about paying for a personal vehicle for yourself.
The benefits of a Stratton Novated Lease can be numerous. For one thing, you might find that you will get a lot more for your money than you would get if your employer were to simply pay you the money as a part of your salary instead. Even though your paycheck might not be as high, you might find that you come out better financially every month.
There are also a lot of tax benefits that go along with a novated lease. Since the amount of the lease is taken out of your pre-tax income, you do not have to worry about paying taxes on this part of your salary. For someone who is looking for every tax break possible, this can be a really good thing.
Additionally, you might find that you are able to qualify to drive a nicer car than what you would be able to drive if you were to go out and purchase or lease a car yourself. Even though your information will be taken into consideration when you lease the car, your employer’s will be as well. The lender will know that your employer will be on the hook for paying back the lease payments, so you can help improve your chances of getting approved for a vehicle that you might not get approved for on your own. For someone who is in a situation in which buying or leasing a car can be difficult, this can be helpful.
Overall, even though a novated lease is not necessarily a good option for every driver, it is definitely something that you may want to check into. If you are currently looking for a job and have been offered a novated lease as a part of your compensation package, you should know that it can be a positive thing that you might want to consider. If you are thinking about asking your current employer to improve your benefits and salary package, it might also be something that you will want to mention. You can also talk to someone from a local dealership or look online for more information about a novated lease if you would like to learn more.
How to Get a Car Finance Loan When You Have Bad Credit
There are a lot of things that can cause a person to have bad credit. You might have lost your job and found yourself unable to pay your bills, or you might have just gotten yourself in too deep and had trouble keeping up. All of these things are normal and can be understandable, but it can make it hard for you to get approved for a car finance loan. Unfortunately, a lot of lenders do look at your credit history when determining whether or not to grant you a loan, and if your credit score is low, you could get denied. This can be unfortunate news when you’re in need of a car and do not have the cash on hand to buy one outright.
Luckily, it is possible to get a Car Finance Stratton loan with bad credit, although it can be a bit more challenging. These are a few tips that can help you do so without having to wait for years for your credit to be repaired.
Buy a Cheaper Car
For one thing, you should know that the cost of the vehicle that you want to finance can have a big impact on the process of getting a car finance loan. Lenders can sometimes be nervous about financing large car purchases for those who do not have good credit scores, so if you’d like to improve your chances of getting a car finance loan, you might want to start your search by looking for an affordable used car. Then, since the loan company will not have to loan you as much money to finance the purchase, it might be more likely to give you an approval.
Save Up as Much for a Down Payment as Possible
Another way that you can improve your chances of getting approved for a car finance loan is by saving up as much of a down payment as you can. Even though your credit history might be bad, being able to save up a significant amount of money to put down on the car can help you show that you are financially stable and responsible. Plus, again, it reduces the amount that the lender has to finance, which can also help you get approved.
Look for Lenders That are Used to Working with People with Bad Credit
Some lenders are more accustomed to working with individuals who have higher credit scores. With these lenders, you might not have much luck in getting approved. If you look for a car finance company that has experience in working with individuals who have bad credit, however, you can help improve your chances of getting approved.
Be Willing to Pay a Higher Interest Rate
Since car finance companies consider themselves to be taking a bigger risk when loaning money to those with bad credit, they often charge a higher interest rate to help make up for the risk. Even though you might want to pay the lowest interest rate possible, this might not be something that you can be picky about if you have bad credit.
As you can see, it is possible to get a car loan when you have bad credit. If you follow these tips, you might find that getting approved is easier than you thought it would be.