An affordable car loan can provide you with the finance that you need in order to be able to buy a new or used car. The car has become an integral part of everyday life for a lot of people – it’s used to get to work, to take the kids to school, and to do the weekly shopping. It can also get us to important appointments and will, generally, make life easier and free up time to do important things. However, it is important that you choose affordable car finance otherwise you run the risk of having the car taken away and a black mark placed on your credit file.
Check Your Credit Score
Any lender will consider your credit history before agreeing to give you a loan. Many will provide you with interest rates and a loan amount that is dependent on your credit score, too. As such, it is important that you know your own credit score – fortunately, you can use credit agencies like Experian to get a free copy of your report. Check it, query any errors, and look for ways that you can improve your score before you apply.
Be Realistic About Your Needs
Be realistic about the type of car you need. If you are an infrequent driver, you don’t necessarily need a brand new car worth tens of thousands of pounds. If most of your journeys are around the city, then a small and affordable city car will usually prove to be your best bet and these are also the most affordable cars. Be realistic and only borrow what you need.
Borrow What You Can Afford
As well as only borrowing what you need, you must consider the repayments and whether you will be able to afford to meet them every single month. A car loan is essentially a type of secured loan, and it is secured against the value of your car. This means that if you repeatedly miss payments and owe a lot of money, your car can be taken from you to repay the debt. What’s more, the less you borrow, the more affordable your car loan becomes.