This month would have been the month I paid my car off. (If I hadn’t dug into my savings and cleared the loan last year, that is.)
If there’s one thing I learned from my experience, it’s the importance of shopping around. Consider a few things: interest rate, fees, and repayment flexibility (in other words, can you make extra payments, or pay off your loan early, and are there penalties?).
Hopefully I won’t need to borrow for a vehicle again, but if I do I’d look into:
Secured loans always have lower interest rates, but there are a few more hoops to jump through. For example, I would have had to go back and forth with my bank to ensure they approved of the vehicle and were happy to lend on that specific one. You will probably also need full car insurance, and to let the insurer know the car is financed. Banks and credit unions all offer secured car loans, as do other finance companies.
Higher interest rates, but less hassle. It would eliminate the step of clearing the car with the lender, as the loan wouldn’t be secured against it. As with car loans, banks, credit unions and other finance companies offer unsecured personal loans – you might find with some lenders like Secure Trust Bank that rates vary depending on the amount of the loan.
There’s a growing number of P2P lending platforms on the market – there are already a handful here! P2P loans can be for a huge number of things, but cars are a common one. Rates vary though and generally you need to start an application to find out what you would get.