It can be overwhelming to try to work out all the costs associated with car loans and car ownership, but before applying for vehicle finance, it can be helpful to have an idea of what to expect.
Understanding how much you’ll owe each month, week or fortnight, and total costs including interest, will help you go into the process knowing what rates you can afford. Knowing how to calculate your car loan payments also allows you to budget properly and ensure you can pay off your car loan on time.
What you need to know to calculate your car loan
Do your research and make sure you understand how much a new car is going to cost and be realistic about what you can afford.
Understanding your finances helps prevent any surprises or struggles from being unable to keep up with your loan payments. Review your budget and work out the numbers that you’re comfortable with so you can make an educated decision when applying for a car loan and considering the best rates for your budget.
To calculate your car loan so that you can work out if it fits within your budget, there are a few things you need to know first. This includes the length of the loan period, the interest rate you’ll pay, and the repayment frequency – weekly, fortnightly, or monthly.
Numerous factors influence the cost of your car loan, and with this information, you may be able to calculate a rough estimate of costs and work out what suits your budget.
You may want to factor in other costs that relate to car ownership when considering your budget, including insurance, registration, maintenance, and petrol. As well as your car loan costs, you need to be able to afford to own a car and keep it running.
Use a car loan calculator
A car loan calculator is an easy-to-use tool that provides a guide on what your car loan repayments amounts may look like depending on your total loan amount, loan term and repayment frequency.
It can be used as a borrowing calculator to work out how much you may be able to borrow, depending on your budget and the repayment schedule you’d like to follow.
A car loan calculator can provide a guide on the interest rate, though it’s important to keep in mind that this may not be the rate you end up with. This tool does not take into account your circumstances, your lender and your credit rating, which can all impact the interest rate you’re eligible for.
While a car loan calculator can be useful, it is designed to provide a guide only, and for more accurate information on calculating your car loan, speaking with a finance specialist is recommended.
Speak to a Finance specialist
Trying to work out your car loan on your own can be confusing and time-consuming, and often one of the best things you can do to make the whole process easier is to get advice from a finance specialist.
A finance specialist can take the hassle out of car loans. They can help you work out what car loan suits your budget and provide information on various fees involved, so you have a full understanding of the costs associated with your car loan before going ahead.
A finance specialist will work to understand your needs and budget and use their knowledge to find car finance options and rates that best suit you.
By understanding your budget, as well as your circumstances, such as the type of car you need and your credit history, a finance specialist will be able to find a car loan that best suits your financial situation. They may be able to help you work out what repayment frequency best fits your budget and choose the most suitable loan term.
If you’re looking for a car loan with the best rates to purchase your next vehicle, contact the team at 360 Finance.
