If you are a first-time driver or want to upgrade your car, you may seek a car loan. Not many people can pay thousands upfront and not take a financial hit. Getting a car loan spreads the payment out over a few years in a much more manageable method.
Normally, you will then pay the loan monthly. You should stick to your budget and only take out a loan amount you can afford. Remember that there are other costs associated with cars so consider all this. You will need to maintain the car, pay for NCTs, tax and insurance, and put fuel in the car however often you need.
Purchasing a car is an important decision. You should compare many options and choose the one that suits you the best. You must also understand what you agree to when you take out a loan and how it will affect your overall finances.
Shopping Around For a Loan
You should shop for the best price when looking for a car loan. You should be finding the lowest interest rate and who is offering the most favourable terms. Multiple sources provide car loans:
Credit Union:
The Credit Union is probably Ireland’s most common option for car loans. Most Credit Union branches will offer car loan interest rates lower than a loan interest rebate at the end of the year. They even provide a specific green car loan for electric or hybrid cars.
With a Credit Union loan, you own the car from the beginning, unlike other options. They also pride themselves on not having any hidden charges from you. People like the freedom to sell the car and the feeling of owning it themselves.
They also offer a competitive loan interest rate, so people go to them for car loans. Most Credit Unions will allow a loan to cover the car and the car Insurance. Get a car insurance quote to see what your insurance will be on your vehicle.
Banks:
Banks such as the Bank of Ireland, Permanent TSB, and AIB offer car loans. They also provide loan calculators on their website if you want to estimate how much your loan would cost over a certain amount of years. These can all be done by enquiring online or calling your local bank.
Revolut:
Revolut has launched a car loan product in Ireland. Customers can apply for a loan up to €75,000 with a repayment term of up to 60 months, and the interest rate ranges from 3.9% to 12.7%.
Customers can choose the currency they want to borrow, and the product is fully digital, with a straightforward application process.
Car Dealers:
Some car dealerships may offer a car loan if you are looking at purchasing a car from them.
How Big a Car Loan Can I Get?
The size of your loan depends on who you go to for your loan and how much you need. You would be surprised how much you can get for a car loan. The main thing is your ability to repay this loan when both parties agree. You should stick to a loan size that you can pay in a reasonable duration. Realistically you may not be able to pay it back in one year, so spread it out.
How Long Do I Have To Pay My Car Loan?
When you get a car loan, you would have agreed on a period in which you will repay the loan. The period is typically anywhere from 1-5 years, but usually, people would go for the 3-5 years option. It will work out cheaper the faster you can pay it, but that should not be your primary focus. You may have other bills and payments to be made each month.
If you are looking for tips on buying a car, read our blog here.
