Your Car Loan TIPS - Part I

• Avoid unsecured loans if possible

Avoid using unsecured personal loans if you can put up some security for your borrowings. This will get you a lower interest rate. A home equity loan / redraw of extra repayments (that allows you to borrow against the equity built up in your own home or investment property), is the best option and could get you finance at up to 5% less than a car loan.

• Tell the truth in loan applications

Be honest about why you want the loan. Your bank may be able to offer you a loan option that better suits your circumstances. There are an increasing variety of different types of personal credit these days for e.g. car loans, commercial loans, leases, home equity loans

• Alternatives to standard loan

There are alternatives to banks, building societies and credit unions if they refuse to lend to you money just because you're self employed, newly arrived in the country or have a poor credit history.These are non-conforming and "low doc" loan market. A number of non-bank lenders offer loans which especially cater for this type of borrower. The interest rates on non-conforming loans are generally higher but come down after a few years of on-time repayments.