While applying and getting approved for a car loan is a long process, the repayment of the principal and the interest amount is a more humongous task. Here is where a car loan repayment calculator comes into the picture.
Before you sign up for a vehicle loan in Australia, it is essential to consider the underlying factors that may affect the repayment options. It includes the tenure, rate of interest, processing charges, among others.
A recent news report stated that the Federal Chamber of Automotive Industries (FCAI) had recorded over 1,00,000 vehicle sales in June 2021.
Read on to understand in detail how car loans can be quickly settled in a hassle-free manner in Australia.
How Does the Process of Applying for a Car Loan Work?
According to research data, as of March 2021, around 14 percent of Australians currently have a car loan. It equals around 2.7 million of the country’s population.
Applying for a car loan involves these basic steps.
- The first step to borrowing money to buy a vehicle is arranging for a pre-approval. Here, you can use a car loan repayment calculator to calculate the final settlement amount.
- Once you have an approximate idea about your loan needs, the next step is to submit the documents for eligibility. Most banks offer online verification of documents.
- Once the amount is finalised, and if approved, you will immediately get the money credited to your bank account.
How Does the Car Loan Repayment Calculator Help?
A car loan calculator is a powerful tool that helps determine the exact loan amount and rate of interest for your new vehicle. It consists of the following parts.
The first input area is for the principal amount. You must enter an approximate value depending on your cash need and the market rate of the vehicle.
Next, you can choose the tenure of the loan application. You can repay your car loan from six months to any time more than five years. You must remember that you must pay an extra amount as interest for the principal amount for a longer tenure.
You can then select the repayment frequency. It can range between weekly, fortnightly, or monthly payment options.
Tips to Get the Best Car Loan
Here are essential tips that can help you get the best EMI rate for your car loan.
It would help if you compared the interest rates between different financial institutions. You can choose the best bank that suits your budget to buy your dream car.
Applying for a shorter duration of the loan amount can help you settle the amount faster and save money on interest.
Calculate the additional charges before you apply for a car loan. It includes processing fees, discharge fees, late payment charges, or other hidden expenses from the banking firm.
Go for a smaller balloon payment. A balloon payment is a predefined amount to be paid as the final settlement for a car loan: the smaller the balloon amount, the more significant savings possible.
Understand the pre-closure clause of the financial institution. It is essential to select a bank that does not charge extra money for pre-closing a car loan in Australia.