10 Questions to Ask Your Car Loan Broker

When it comes to applying for a loan, a broker can often be a big help. Here are 10 questions you could ask your broker if you’re about to put in a car loan application.

How much can I reasonably borrow?

Most people know what they would like to borrow, but whether it’s reasonable could be another question. A broker should be able to work with you to determine what might be an acceptable amount for your needs. That will take into account both the lender’s appetite and likely assessment of your ability to service the loan, and how the repayments might fit into your budget. Things that will be considered include your income, commitments, outgoings and level of deposit you’re putting into the purchase.

What interest rate will I be charged?

You’ll want to what interest rates are on offer to you, and whether a fixed or variable rate structure might suit your circumstances.

What might the repayments be?

Your broker will also give you an indication of what your repayments will be. This can help you to work out your new budget.

What is the term of the loan?

The term of the loan refers to how many years you’ll be paying it off. Generally, shorter-term loans come with higher repayments but lower total interest cost over the life of the loan, while longer terms have lower repayments but you generally pay more in interest than a shorter term loan. Sometimes it may make sense to have a loan that is set up over a longer term and make additional payments if you can to pay it back more quickly – a broker can help you to work through this.

Can I make lump sum payments?

If you have the good fortune of some extra money arriving in your bank account from time to time, you may want to be able to use it to pay down your loan balance. Your broker could explain to you how that would work and whether any fees would be charged for additional repayments.

Can I increase my regular repayment?

Another way to pay off a loan more quickly is to increase your regular repayment. Some lenders have rules around how much you can increase your payments before a fee applies and again, your broker can help you understand your options.

What happens if something happens that means I struggle with my repayments?

Sometimes in life, things don’t go quite to plan. Brokers have experience of how lenders handle this and can advise you on how the lender you’re considering borrowing from might deal with the situation. In general, in need, your broker should be able to help you facilitate the hardship process with the credit provider.

Are there any fees I need to know about?

It helps to know exactly what you’re likely to be asked to pay – your broker should give you a rundown of any additional fees that might apply.

Which lender is a good fit for me?

Brokers spend a lot of time in the market and usually have a good sense of which lender is open to what type of lending at any given time. There are over 50 lenders in Australia, so it can be pretty overwhelming and difficult to find the right fit for your needs on your own. A broker, on the other hand, works with lenders everyway, and use their experience and expertise to help find the right loan- rate and repayment – for your needs.

Like to talk?

We’re all about doing things better. If you’re looking for help with a car, motorbike, jet ski or caravan loan, drop us a line. We’d love to chat about how we might be able to help.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments. This information does not take into account your objectives, financial situation or needs.  To consider whether a credit product is right for you speak to a licensed Finance Broker and review the product issuers Target Market Determination (TMD) before making a purchase decision.