Interest Rates Explained – In Simple Terms !!People always ask me, “so what are your rates”?
- May 9, 2018
- Posted by Get That Car Loan
- Comments Off on Interest Rates Explained – In Simple Terms !!
The Number 1 Question – What is your Interest Rate ?
Listed below is a simple & quick run-down on interest rates when it comes to purchasing your next vehicle.
People always ask me, “so what are your rates”? My bank/finance company told me on the phone that I will get 4.25% !!
Some companies advertise rates which are often quite far removed from what they can actually offer.
We have two main variable factors and when those two factors intersect that gives us the rate. The first variable is the Asset Class and the second is the Client Profile so let’s have a brief look at each.
ASSET CLASS – This means the quality of the asset, the speed of which the lender is able to get out of the asset if the loan defaults, the estimated loss the lender is likely to suffer if the asset is auctioned off.
CLIENT PROFILE – The client profile means the risk assessment on the lend correlated to the client’s profile, so has the client been in consistent employment, do they have comparable credit (Other loans), does the client have any blemishes on their credit file or is it clear? Is this client asset-backed with a property or are they renting? Can the client afford to pay the loan?
As you can see there are several factors that go into consideration when arriving at the interest rate on offer for each client looking to purchase a vehicle. There are some general rules of the game that are worth noting.
Firstly, the older the vehicle in general the higher the rate is going to be, secondly if you’re asset-backed and have a mortgage then most of the time the lender will require NO deposit & rates are often slightly cheaper.
In summary, rates vary a lot depending on the asset and the client profile and it’s about negotiating the best rate and term we can by pitching the deal to credit in a strong light accompanied by a range of supporting documents. A good broker will ask you a lot of questions, this is not because they are nosey, it is because the more information they have, the stronger they can make your profile – The stronger your profile is, the less risk deemed from the lender, the better your deal will be.
When we submit clients to credit we study profile in absolute detail and make sure that the credit analyst understands why the client is purchasing the asset and is in agreeance that it’s going to be a good financial decision to approve the loan.
This comes down to experience, tenacity and the desire to see our clients succeed. if you would like us to get you across the line or even just get a quote and plan for the acquisition of a future vehicle.
please don’t hesitate to call us on 1300 799225 or Apply Online www.getthatcarloan.com.au