Getting a car/vehicle loan works in a very similar way to getting a mortgage loan. However, since the amount of money you need to purchase a vehicle is significantly lower than the one you need to buy a property, it’s much easier to qualify for a car loan than a mortgage. Whether you want to purchase a new or used car or do a lease buyout (buy a car at the end of your lease term), you’ll have to submit a loan application, go through a credit check and wait to get approved for your car loan. Please note that if you are purchasing a used car, some lenders may require an inspection to ascertain the vehicle’s condition and value.
When shopping around for a car, you should follow the same logic as when purchasing a property. Only start looking at vehicles after you know the rough budget you're working with.
Car loans come in many shapes and forms. They can be short—or long-term loans with a fixed or variable interest rate. The typical term is 36 to 84 months.
Generally, if your income stream(s) allow for this, it’s always better to take out a short-term car loan. Your monthly payments will be higher. However, your interest rate will be significantly lower.
As car loans are typically secured (the vehicle you’re purchasing is used as collateral for the loan), defaulting on your loan payments will result in the lender repossessing your vehicle, which will negatively impact your credit score. This is why it’s important to carefully assess how much you’ll be able to pay monthly, especially if you also have other loans on your balance.
With access to a vast network of car loan lenders, you can rest assured we’ll find the best possible car/vehicle loan solution fitting your financial situation and goals.
