When considering Vehicle Financing there are usually a number of factors that influence your decision. It’s also important to go through this process with a lending institution that understands your needs. Ideally, your bank should be your first choice for financing as they have a better understanding of your financial behaviour and your past transactions and payment history. This process should not be a difficult process if you have a good relationship with your bank.
Here are some things to consider when seeking vehicle finance:
Make sure you’re in good financial standing. This way you know that you can definitely afford to make repayments on the vehicle finance.
Don’t only base your affordability calculation on the repayment you need to make on the loan. Take into consideration the general running costs that come with owning a vehicle.
Be careful when deciding between a fixed or linked interest rate. Both options have their pros and cons, so factor that into your decision and do the necessary research.
Consider the repayment period carefully. Remember that the longer the repayment period, the longer you have to pay the loan, which works to your advantage. On the negative side though, you end up paying more interest in the long run.
The balloon payment is an inflated final instalment which is agreed upon upfront. Usually you have to pay this amount at the end of the contract. Your monthly instalment is reduced which gives you an easier way of paying the loan without straining your pockets too much.
Do your research thoroughly. This may be one of the most important factors to consider.When considering Vehicle Financing It’s vital to ask as many questions as possible and to compare offers from various lending institutions.
What documents are required?
- A valid South African I.D.
- A valid Drivers’ licence
- Your latest payslip
- Proof of residence
If your salary is commission-based bring at least 6 months’ bank statements.