What's the best rate?
Written on the 12 December 2020 by Nathan Drew, Fox Finance Group
I hear our team get asked this question alot, so I thought that I would pen my thoughts down on this for you.
Conversations like this one below happen in our office on the daily, and as your trusted Finance Professional we are here to help you fully understand what the "best deal" means for you and your own circumstance.
Our intention is help you understand what types of terms and conditions affect your perceived "best deal" and understand what things you really need to consider in order to get the best loan deal on the market today!
Let's say we are speaking with our customer, let's name him John. The conversation generally goes like this....
John if you don't understand which lenders are offering the best loan rates today, it pays to have someone in your corner helping you make this major financial decision. Let me tell you John, you've come to the right place when it comes to comparing loans, this is what I do all day every day and I love the challenge of finding my customers the best deal out there right now.
There are four main things to consider when trying to get the best loan deal, they are the interest rate, loan duration, loan repayment and any additional fees charged by the lender.
As you can probably appreciate John, the interest charged on your loan is essentially the cost of borrowing money from the lender, and a lower rate is generally favourable. However, getting the best deal for you also depends on other factors, for example, the duration of the loan. I can tell you that most of our customers tend to choose between five and seven year loan terms.
If we use our car loan repayment calculator for this example; let us say you are seeking a car loan for $20,000, and you have been presented with two loan options. The first is a five year car loan at 6.75%, and the second is a seven year car loan at 5.5%.
You might immediately assume that the lower interest rate is the best choice - but let us look at how the difference in loan duration can affect the amount of interest you will pay. If you choose the 5.5% interest rate over seven years, you will be making weekly repayments of $66.23 and a total of $4,106.88 in interest over the life of the loan.
However, if you selected the higher interest rate of 6.75% over a five year term, you will repay $90.68 each week, with a total of $3,577.34 in interest - saving you $529.54 in interest and having you own your car 2 years earlier. Your decision may then come down to your ability to repay the higher repayment amount each week to take advantage of this saving of time and money.
Does that make sense John?
Now John, consider this for a moment - if your loan repayment budget allows it, and you want to really save money, you could make loan repayments of $141.71 each week which would reduce your loan term to 3 years and save you over $2,000 in interest, plus this would have you owning your car 4 years earlier.
So you see John the most important thing for us to know right now is what is your loan repayment budget? From there I can help you structure your loan in the best way possible to help you save the most amount of money across your whole loan term, which at the end of the day is my job, to help you save the most amount of money.
So John, what is the Loan Repayment Budget that you have set out for this purchase?
Do you have someone experienced in your corner?
Fox Finance Group is one of Australia's leading personalised financial service organisations. We have spent many years getting things right so that you can rest assured that you are getting the very best financial advice available on the market today. We work for you, not the banks, plus we can have a car loan pre-approval ready to go the same day!
As a Fox Finance Group Client, you have access to your very own Accredited Loan Specialist along with access to your very own Qualified Financial Planner. Our team comprises of specialists with many years' experience in Car Loans, Home Loans, Bike Loans, Boat Loans, Jet Ski Loans, Camper Trailer and Caravan Loans, Truck Loans, Personal Loans, Business Loans, Insurance, Financial Planning and more. Yes, we have a large team here at Fox Finance Group ready to help you.
We pride ourselves on the unique personalised service that we provide our Clients. Your Fox Finance Group Lending Specialist can help you either over the phone, via email, at your home, at your work or at your own business. You get their direct email address and phone number, which makes it easy for you to stay in contact with them when you have questions.
If you have more questions, why not pick up the phone and speak with the team today on 1300 665 906. We are here to help.
Author:Nathan Drew, Fox Finance Group
About: Managing Director - Fox Finance GroupConnect via:LinkedIn