A car is a major purchase, which is why you need to consider your options carefully. To help you out in your search and reduce your costs overall, here are a few tips on shopping for a car loan.
Establish your budget beforehand
The first step is to determine how much you can afford. This would establish the kind of vehicle you’re going to buy, whether it’s new or second hand, and what your financing options are. To arrive at this decision, you need to compute your expenses and see if you have enough money for the purchase.
See how much the car costs
Once you establish your spending plan, check how much the corresponding cars cost in Sweden. If you have a particular model in mind, see if it would fit your budget first. For instance, if your funds dictate that you can afford a new car within $14,000, then you should limit your search to that price bracket.
Check your credit score
But before you actually start shopping for a car loan in Sweden, you need to check your credit rating first so that you can be sure you’re getting a low interest rate. If you have poor credit, getting a car loan may be difficult and/or expensive so you may have to consider other financing options (more on this later).
Research and compare several loans
You can start your search for a billiga billån online. There are some good financial portals inn Sweden that will provide you with loan calculators to help you out. Just enter the loan amount, choose the term length, then click the Find Products button to see the results. The results are arranged by interest rate. From here, you can view each car loan’s website, get the information you need, compute your monthly repayments using our car loans calculator, and see which deals you like.
Get pre-approved for a car loan
Before you set foot in a dealership, make sure you get a pre-approved loan since it’s cheaper than the loans that car dealers offer. In addition, you can also use the pre-approved loan as a bargaining chip in case you do try to negotiate a loan from the dealer.
Don’t go over five years
Whatever you do, never get a car loan that takes longer than five years to pay. Some dealerships will offer six- or seven-year terms, which virtually assures that your car loan will be upside-down (i.e. the loan will cost more than the car’s actual market value). You’ll be making payments well after the warranty.
Focus on the loan amount
Dealership salespeople will ask you how much you can afford monthly and try to lower this amount, but focus on negotiating the loan amount instead. Lowering the monthly may help you save a few hundred per month, but this only add to the loan’s interest and keep you in debt longer.
Look beyond the interest rate
The interest rate isn’t everything. There are other variables that you need to look at, such as the term length, payment frequency (monthly, weekly or fortnightly), fees and charges (annual fees, processing fees, early payment charges), and insurance—all of which can make the loan easier or more difficult to pay off.
Consider other finance options
If you have poor credit or are unemployed, a regular car loan is pretty much out of your hands. However, there are still other ways to finance your purchase. You can use your credit card, your home’s equity, a personal overdraft, or maybe a payday loan. If all else fails, you can just save for the car.