Wanting to take the step and buy a car but are unsure how? Our comprehensive guide on “the dos and don’ts” related to car financing is here to help. You’ll discover that it’s easier than ever before for anyone, regardless of budget size, to get behind the wheel of their dream vehicle with manageable payments over time! So buckle up; understanding car finance does not have to be rocket science after all!
Understanding Credit Scores
An individual’s credit score in Australia is considered one of the primary factors for lenders when deciding whether to approve a loan. Accounting for the borrowers’ past debt management and payment history, acting one could say like a ‘financial trust meter’. A good credit score is likely to secure lower interest rates with greater confidence from lenders that the loan will be repaid on time. In contrast, those with poor scores may struggle for access – although, if accepted, they could face a higher interest rate due to the increased risk taken by financiers.
Challenges of Getting Car Finance
People looking for car finance in Australia may face several challenges, including:
- In an effort to keep inflation in check, the Federal Reserve has been steadily increasing interest rates – impacting borrowers directly by raising costs associated with car loans and other forms of borrowing.
- Many auto lenders are taking extra caution when evaluating loan applications. By tightening their standards and requirements, they seek to protect themselves and borrowers from the debt associated with defaulted payments.
- As a result of tight supply caused by chip shortages, vehicle prices have soared- making it challenging to secure cheaper alternatives.
Tips for Improving Your Approval Chances
Are you worried about whether you’re eligible for finance? Not to worry, preparing yourself becomes ezpz with these three tips:
- Paying bills on time – Although it may be commonplace to miss the occasional due date, making this behaviour a habit can damage your credit score. To protect it, stay on top of all bills and payments, predict when they will be due and budget accordingly. You may also want to take advantage of automatic payment options for bill and credit card payments to ensure you never miss a payment again.
- Build up your savings – Maintaining a reserve of funds in case of an emergency can help you pay your bills on time. Savings accounts often offer better interest rates than regular transaction accounts (unless you take out a fixed-term loan) and provide easy access if necessary.
- Regularly pay off debt – Although debt can be manageable, it’s important to make timely payments on any credit cards or personal loans. At a minimum, you should always pay the amount due each month by the due date – but even more could be beneficial, as it could lessen interest charges and increase your credit score.
- Keeping good banking conduct is a must. Having missed payments, payment dishonours and getting hit with penalty charges is one thing. However, this might mean that you have to wait 3-6 months before getting accepted or having to have a higher interest rate just because you missed 1 or 2 payments.
Come to EZPZ for Car Finance
Looking for a reliable lender in this realm can be tricky, but luckily, there’s an ez answer. Using our MYCARBUDDY system, we help you skip the hassle of searching and sourcing your dream car while finding terms and flexible repayment options designed to suit your needs so you’re ready to hit the roads with peace of mind. Our team is dedicated to ensuring you get into your dream car as quickly as possible – all while keeping affordability top-of-mind.
At ezpz Finance, we make finance ez. If you would like to discuss taking out a car loan, follow the link provided: Car Finance Perth – EZPZ Finance
