Gone are the days where owning a car was associated with statuesque. Today, it has become a necessity. With a range of car finance offers in Sydney, buying a dream car is not a big deal.
So you are one among them who wanted to own your dream car and looking for a car loan? Well, hold your horses. Before rushing to apply for a car loan, have you ever thought about the car loan interest rates offered by the bank or car financing company? Well, no! Most of us don’t bother much about the interest, and we are worried about the tenure. What we fail to understand is the link between the tenure and the interest rate.
Yes, it’s always a tough call when it comes to the tenure of car loans Sydney. That said, shorter tenure is the best solution and here are a few valuable reasons why you need to consider:-
Added financial burden
The longer your loan tenure, the higher the interest– this is one of the major factors that every individual should keep in mind when applying for a loan, regardless of the purpose. Also, this is the significant reason why you need to opt for shorter tenure over longer months. Given the fact that the average usage period of a car is not more than five years before the owner sells the car, the long-term loan tenure will be a hassle as the buyer has to continue to pay the loan.
Even a car manufacturer doesn’t offer a warranty for eight or more years. This means you’ll have to spend more for the maintenance of the vehicle. Hence, the high maintenance cost coupled with the EMI can result in a financial burden for you.
This is another major reason why you need to go for shorter tenure loans is that the lenders set a high-interest rate on long tenure loans for the risks that banks and financial companies taking for the borrower. When compared to a three-year personal car loans Sydney, you will be paying more interest for a longer period.
Avoid purchasing a high-end car which you can’t afford
The chances are high that you are opting for a longer tenure car loan to get a lower EMI amount. What does that indicate? Well, you are trying to purchase a car that doesn’t fit in your budget or which you cannot afford on considering your current income and repayment capacity. The plans to have a long-tenure car loan can backfire in the long run. In fact, you’ll end up paying more than the actual cost of the car.
As you see, longer-tenure loans are a great financial burden for you. You need to be very careful while opting for a car loan. Check the rate of interest of the lender and then choose the tenure accordingly.
The author works in a reputed car finance company and offers a wide range of flexible financing services, including car loans Sydney. Visit http://financingandco.com.au/ for more details.