Tips on using loans to finance vehicle purchases

So you have found a nice shiny car or motorbike that seems like the bargain that you have been looking for. Perhaps you have the cash in the bank, or are selling another vehicle in order to pay for it. If so, all well and good. Perhaps though, you need to borrow the money from somewhere. This is where a Personal Loan comes in. Unlike a number of years ago, when you had to justify to your bank what you wanted a loan for, things are a lot easier and more civilised nowadays. Many lenders have no interest in the purpose of your loan, just that you can pay the loan back. Quite right too!So I go straight to my bank for a loan then?Nope! Mainstream banks are typically not the most competetive when it comes topersonal loans and finance. There is a myriad of options for loans out thereenabling you to find the lender and the financial product most suited to you and your needs and for less money. In fact many banks have an online presence branded totally differently from the main business. So you could get a loanfrom your bank more cheaply than going to your bank.What sort of a loan would I need?A loan can be a 'secured loan' or an 'unsecured loans'. Well in this case, we are really talking about financing a vehicle purchase with a personal loan and for that, an 'unsecured loan' is best. Firstly you don't need to be a property owner to apply for the loan, and secondly, you aren't putting your property at risk if you have problems servicing the loan later on.Brilliant, I shall get an unsecured personal loanHold on a minute. There is a bit more to getting a loan than that. You need to make sure that you read that boring stuff - the small print. It is there that important information about the loan that you are entering into - it is a contract. You need to check for at least the following:-The loan APR or Annual Percentage Rate is the rate that most people will be charged for a personal loan from a given company. If you are perceived as a higher risk, they may wish to charge you more for the loan. If so, you can always try another finance company.Early Penalty/Redemption Charges are additional charges a finance company may make if you decide to pay off your personal loan early. Obviously when you take out a loan, the finance company is counting on making a profit each month from your repayments, if you are paying back your loan early, they no longer have that option.Loan Payment Protection Insurance is usually an option with personal loans, but an option that may be applied by default so if you don't want or need it, ensure that is what you are getting. If you decide to have loan payment protection, then carefully check the rules to ensure that you would benefit if you have trouble making payments.The most important thing with a loan is to read the loan details very carefully,and if you don't understand them, get some advice from someone who does. Hopefully, that shiny new car will be yours soon :-)

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