How to qualify for a car loan in 2021

02 Jun 2021

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2021 is a bumper year for car sales, with every month so far recording an uptick in car sales compared to the same month in 2020.

With coronavirus restrictions largely lifted across the states, dealerships have mostly returned to normal. On top of this, consumer confidence is back, and people are willing to spend money. That, and COVID has forced us to rethink life’s priorities, with utes and SUVs all the rage right now. So, the main question is, how do you finance a car in 2021? We’ll run you through the tips and tricks on how to secure a car loan below.

Tips on how to finance a car in 2021

Despite 2020 and 2021 being strange years for a lot of people, the car buying and finance process largely remains the same with these tried-and-true tips.

Use a car loan calculator

A car loan calculator is a handy tool you can use to get a rough estimate of your car loan repayments, whether that’s weekly, fortnightly, or monthly. You’ll be able to budget your monthly expenses such as rent and groceries, and figure out how the car payment ties in with that. This way, when you decide to take out a loan, and you’ll know if you can actually afford the repayments.

Deposits and balloon payments

A deposit and/or a balloon payment could reduce your repayment, and how much interest is ultimately paid. A balloon payment is essentially a lump sum payable at the end of your car loan, and can often be as high as 30%. It’s important you don’t forget this payment, but it can lower your repayments throughout the life of the loan.

Get pre-approval

Some lenders offer car loan pre-approval so you can go out shopping with a budget in mind. Getting a pre-approval will help you narrow down your choices in terms of the price range, and what’s available in that price range. You’ll get an idea to how much you can spend on a car, and how much you can borrow to purchase a car.

Have good credit history

If you have a demonstrated history of paying off debt on-time, and/or no history of defaults, then this can aid in attaining a more competitive car loan interest rate. However, if you’re not certain your credit history is the best, then no worry, carloans.com.au can work with its network to secure a competitive interest rate for you.

If you have a low credit score, some of our lenders may be able to help you secure a bad credit car loan.

Shop around for a car loan

As with any other kind of purchase, it's important to shop around for your car loan instead of just taking the first offer, or automatically going with the dealership’s finance offer. By arming yourself with some finance knowledge, this will help you resist pressure to take the finance the dealer is offering if it's not good value. Carloans.com.au works with a panel of almost 30 lenders to find you the right car loan for you, saving you time, hassle, and stress.

If you’re ready to finance your new car, speak with one of our car loan specialists today to get started on your car buying journey.

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