Tips to Budget for Your Car Loan Repayments

Car Loan

There is no point in making a budget which is unrealistic. You need to assess your regular habits and take the cost into consideration. Ask yourself how realistic is it to give up nights out, takeaway food and dining out for the entire duration of the loan. In order to properly budget for your car loan repayments, you need to write down all of your expenses including rent/ mortgage, utility bills, groceries, clothing, treats, gym membership and other financial commitments. You should also consider the additional expenses associated with the new car including fuel, insurance and maintenance and especially the loan repayment.

Prioritise Your Needs:

While you are assessing your expenses, you need to priorities what you consider to be important. While basic utilities and housing costs are essential, could you cut back on dining out to once or twice a month instead of every week? This could save you a great deal of money without missing out on your treats.

Plan for Savings:

Most people overlook savings in their monthly budget but even saving ten percent of your income can provide a nice safety buffer for unexpected costs such as repair bills or unanticipated bills. It can be a good idea to set a small amount aside each month for saving in a different bank account which is not as convenient to access. This will minimise the risk of you dipping into the funds for non essential items.

Revisit and Review:

Your budget should be written down or kept on your computer to allow you to regularly revisit and review the details. You can compare your budget with your bank statements and actual outgoings to ensure that it is still accurate and applicable.

Seek Out a Great Finance Deal:

Many people simply opt for the first finance deal available, but it can be a good idea to fully research your options. This will provide the information needed to make an informed choice about whether the deal is actually your best option. If your budget is particularly restrictive, you could choose a lower monthly repayment by having your loan run across a longer term. This can decrease the monthly cost but you will pay a greater total amount due to the additional interest charges. This makes it essential to obtain a great rate, to minimise costs.

If you are looking for a great deal on a loan and would like some car loan repayments examples, contact us. We are a specialist broker with access to a large number of lenders. Our experienced advisers would be happy to answer any questions you may have, explain the effect of different rates or terms on your potential monthly repayments and help you to secure the best possible deal.

Daniel Smithe is automotive and equipment finance consultant of new and used auto finance Perth. He has been writing articles for last 20 years. He has interest in supplying financial solutions to the people and usually written articles for the benefits of car loan and car loan repayments from All Credit Finance.