Many people believe that having a down payment for a car loan in Barrie is essential to getting your loan approved.
After all, when you apply for a mortgage on a home, you certainly better come with a sizeable chunk of change to secure the loan, otherwise you could get stuck paying even more money in insurance fees.
So how much do you really need for a down payment for a car loan?
There is no one single answer to this question, as each car, lender, and borrower will be different and expect different things. We’ve put together a general overview of what to expect when looking at a down payment. Read on to find out more!
What is a down payment?
A down payment is an initial sum of money that is paid to the lender at the start of a loan. This amount will be used to secure your loan, and will count towards the total purchase price of the car. This is generally some percentage of the purchase, for example, 20% or so.
Generally speaking, a down payment is always a good idea when considering a loan. This has a gives you a financial advantage as it reduces the amount you would be borrowing in the first place. This way, your monthly repayments will count towards equity in your new car sooner, meaning you’ll pay less interest than otherwise.
It’s best to have your down payment as large as possible. Putting as much money down as possible without stretching yourself financially is an investment in your future, as you’ll ultimately end up shelling out less cash to the lender over the long term.
How much should I put in my down payment?
When it comes to issues relating to down payment, many wish to know the exact or guesstimated figure to pay for a down payment on a car loan.
Widely, most financial institutions don’t have an exact figure for a down payment. Since paying a down payment is based on personal choice, trying to guesstimate an exact figure is highly subjective. But if you would like to pay a down payment especially for a new car, try to save up to 20% of the total amount payable (interest inclusive) from securing the auto loan. If it’s a used car, you should at least have a sum total of 10% of the total amount payable. Always remember that a down payment is the greatest negotiation tool when it comes to agreeing to a loan term.
You don’t need a down payment to get an auto loan
While there are some loans that absolutely require a down payment, in recent years, car loans are no longer one of them. Lenders have recognised that many people struggle to save up a decent amount for a down payment, which is why they now offer ‘Zero Down’ car loan options.
A no down payment car loan will usually come with some extra stipulations, such as a longer loan term, higher interest rates, or other kinds of fees. While it is generally advisable to still save up for a down payment, but you still have options if you don’t have enough. Barrie Bad Credit Car Loans offers an extensive range of car loan options including no down payment car loans. We negotiate hard with our lenders to secure the lowest interest rates possible even without a down payment. Contact us today to find out what we can do for you!
Getting your dream ride
Securing a good auto loan rate is best for you. Try to pay attention to every detail while securing a car loan. Read the applications carefully and follow every bit of information. If you’re confused at any point, don’t assume and seek clarification immediately. Ignorance is not an excuse when filing for a loan.
You wouldn’t like to stay indebted for too long so stick to the most convenient loan term that allows for easy payment. Remember that a loan is a liability so, be thoughtful. If buying a car is not a necessity at that time, you could save up and apply for the auto loan some other time. A car quickly depreciates in value so, ensure that the features of the car you’re filing for, and are to your specifications. If you’re going to incur debt for an auto loan, ensure you’ve got the maximum value for the risk you’re taking.
Looking for an auto loan without down payments?
Ever considered getting your auto loans without a down payment? Barrie Bad Credit Car Loans offers you auto loans without any form of down payment. We offer the best and most customer-friendly interest rates for our auto loans. We offer a considerate flexible payment option which allows for ease of payment for our auto loans. Once you’ve picked your dream car, we’ll even deliver it anywhere in Ontario, completely for free!