How to Pick Up a Car Loan and Save money? Pay 40% Less
We all want to own a car. It gives us independence, it makes us save time, and avoid crowded buses. However, not all of us can pay for a car on a single payment. In this opportunity, we want to show you how you can pick up a car loan in South Africa. We will tell you the different loan options you have to buy a new or second-hand car. When you finish reading this, you will have an idea of what car you can qualify for, which loan is best for you, and how to calculate your repayments. So, let’s get to it.
How can I get an Instant Online Car Finance Quote?
We live in hectic days, don’t we? So many things to do and so little time to actually comply with all our obligations. And let’s not forget about time to share with our family. Most of us, work long hours and having to move from one place to another just to inquire about a car seller about something is out of the question.
The same thing happens to sellers, it’s no good for them to have their store swamped by people asking for quotes. For this reason, most car dealers, and banks in South Africa provide online platforms for you to request car finance quotes, and if you want, to start your car loan application.
How to Use a Car Finance Calculator Online with Balloon?
First, you need to understand what a balloon payment is in relation to car finance. This practice has become very common in South Africa. It implies that the borrower and the lender agree on a kind of payment where a portion of the loan amount is pushed back for later. In this way, you pay lower installments for a certain period and when you finish these payments you have to pay for that remaining percentage of the loan in a single payment.
Our IT staff has developed an amazing tool that will help you know your car loan structure better. You will be able to see how much will your repayments be, and see the approximate amounts for interest rates. Also, one of the key advantages of our calculator is that it lets you compare offers from different lending companies. For instance, you’ll discover which company has the lowest interest rate. Why is this so cool? This is because you will get an objective comparison of the different offers you’ll find in the credit market.
What is the Best Way to Find Cheap Car Loans?
Buying a car might be expensive, especially if you want to buy a new one. Of course, there are different price ranges among new cars. However, you may be able to find a used car in perfect conditions and pay much less for it. And consequently, if the car is cheaper, the loan will be cheaper and you will have to make lower payments, as well.
You can find small vehicle loans to buy a second-hand car both in private companies and banks. Later on, in this article we will talk about the different offers. For now, we want you to weigh up this option. Why take a fancy to a new car, when you can take out a loan to buy a used car without risking your financial situation like a loan without payslips. Besides, consider that you might be able to buy a new car once you finish paying your car loan. It’s not the same to buy a new car without having a car than already owning a car which you can sell. In this way, you sell your old car and can ask for a personal loan to cover the difference.
What is Pre-approved Vehicle finance?
In South Africa, pre-approval for vehicle finance means that you start your application process with the credit company before you go to the car dealer. One of the main benefits of these car loans is that you go to the car shop with a budget in mind. You already know how much money the bank will lend you and you have to stick to that amount.
When you start a loan application from scratch and hand in all your documentation, the lender will run a credit and affordability checks on you. This is why car finance approval might take a week or more if something goes wrong. For example, if one of the documents you provided is not valid. Pre-approved car loans might take a shorter time to be approved since all the investigation as regards your financial condition has already been taken care of.
What do you Need to Qualify for a Car Loan in South Africa?
In South Africa, you have plenty of options if you wish to buy a car. There are many companies offering loans, but do you qualify for them? Every reputable and trustworthy credit institution will require certain eligibility criteria before approving your loan. Basically, because they need to be 100% sure you will pay them back.
The kind of qualifying conditions will depend on the credit company, but here we will outline the items requested by most of them.
- You absolutely need to be of legal age (at least 18 years)
- You need to legally reside in South Africa
- You have to be employed (permanently)
- You need to earn a certain minimum every month (some banks set the minimum at R5 000)
- You should have a bank account
If you meet the basic requirements, you can start looking at what car you can buy with the loan. One way of assessing the figure you’ll need is looking for car prices and then using our car loan calculator to see which vehicle you can afford.
Do I have to Pay an Initiation Fee if I Apply for Vehicle Finance?
Credit companies are not obligated to charge an initiation fee on their loans, but usually, they do. If a bank or another lending company charges this fee, you will be required to pay for it. It’s a fee that you only have to cover for once at the beginning of your loan term. The prices for these fees will be different according to the bank or borrower you choose; however, they are usually around R1 000.
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How to Get a Car Loan at a Bank?
It is so common that when we decide we want to buy a car we become quite anxious and rush ourselves to making a decision. Give it a rest, though. Before you jump into any decision, weigh in your options, and in this way you will be able to find the best car loans in South Africa.
You should first check if your credit history is in good standing. Then, grab your calculator and do numbers: how much do you earn? How much money can you set aside to pay for a car loan? Once you know your budget, you are ready to choose the car you would like to buy and that you can actually afford.
To apply for a loan at a bank you need to know their specific requirements. Most banks need you to provide them with your ID, a valid driving license, certificate that you reside in South Africa (where your address is stated), and your three last payment receipts (you have to have a permanent job). We urge you to browse our site to find articles dealing with specific banks to know all the requirements you need. Or, if you want, you can use our form below and ask for information.
2 Excellent Banks that Finance Used Cars
When you are freelance or you have a tight budget, sometimes buying a new car can turn into a real nightmare. Your repayments will be high and to that you have to add insurance costs, expenses related to registering your car, and such. So don’t feel bad about buying a used car. You might be able to find a great car anyway. Here we want to focus on 2 banks that offer loans on used cars with competitive rates and that even offer loans on cars older than 10 years.
The first one is Nedbank. With this bank you can buy a secondhand car from R40 000 to a maximum of R250 000 and you can repay it from 6 months to 72 months. Talk about flexibility! You can buy a car of up to 20 years old. Also, one of the greatest characteristics of their loan is that you don’t need to make a deposit: they finance the whole amount of the car.
The second one is FNB. Here you can buy up to a ten-year-old car if you buy from a dealership; and up to a 20-year-old car if you buy from a private seller. Contrary to Nedbank, with FNB you will have to make a deposit. With FNB you will know the result of your application within 30 minutes.
Which Bank offers Vehicle Car Finance in South Africa?
Finding a loan for heavy vehicles is not such an easy task. Why? Well, they’re expensive. For instance, you can find a truck in South Africa from over R600 000 to more than a million Rands. Not everybody can afford that amount or has all the qualifying criteria to access a loan for that sum.
If you own a company, you can consider car finance for business at Absa. They have a commercial asset loan with many options for you to buy vehicles in installments. They offer a repayment term that ranges from 24 to 72 months. Also, if you want to have lower repayment amounts you can opt for a balloon payment that you’ll have to make when your loan ends.
Finally, if you wish to investigate this option a bit more, you can use a vehicle loan calculator. As mentioned above, we have one of our own that will help you compare your options.
Can my Car Loan Affect my Mortgage Request?
Many people will not see how a car loan and a mortgage can be connected. Well, they can be. Whenever you take out loans, information is shared with your Credit Bureau Score. And the more money you owe the poorer credit score you will have. Paying your installments late, having matured credit card payments, or having many loans at a time will affect your mortgage application.
The mortgage will be affected since, depending on how bad your credit is, you can either be offered much higher interest rates or not qualifying for a mortgage at all. Mind that having a healthy financial behavior is important for your future and the future of your family.
Does BTS Offer Vehicle Finance?
Borez Trading Services (Pty) Ltd was set up in 2013 to offer financial services for small and medium-sized companies in South Africa. They specialize in small-term loans, and they also offer vehicle finance. They also have a vehicle loan program to assist people with bad credit who want to buy a car. There is little information about this company, and thus, reviews about their services are non-existent. Since we care about your financial security, we invite you to consider the other options mentioned in this article.
Along with this text, we tried to fill you in with all the info about vehicle finance in South Africa. We are aware that we all want to own a car and that sometimes we’ve been dreaming about a specific brand. But can we afford it? Thus, we wanted to show you the best and safest way to pick a car loan, according to your financial situation. We’ve discussed that if you want to save money you can consider picking a loan to buy a used car and introduced you to the best banks to find these loans. Also, we told you how to know the approximate amounts you would pay and how to know if you qualify for a car loan. Questions? Comments? We want to hear from you.
Questions and answers
Can I get financed if I’m 17 years old?
No, you must be older than 18.
Can I apply with Wesbank if I’m not South African?
Yes, as long as you are a permanent resident.
Should I enter a balloon payment when I use the calculator?
Only if you want to.