How to Calculate Car Finance

Some non-bank financial institutions that offer car loans in Porirua have a minimum or a maximum amount that they can lend, regardless of your financial capability. Apart from the amount you can borrow, you will also notice many differences in interest rates, payment terms and options as you approach different companies. Before you finalise your car loan, you would need to carefully calculate the amount that you can borrow from a company without sacrificing basic expenditures.

The amount you can borrow from a non-bank financial institution in Porirua that offers car finance, depends on a large set of factors. Individual financial circumstances, how much security deposit you are able to provide, the age and value of the vehicle that you want to purchase, your age, your level of income and other such relevant risk factors would need to be considered to find out the limit of your loan amount.

If you want to be able to estimate how much car finance you can borrow then use this simple technique to find out how much money you would be able to pay back within a particular period of time. Say that you are a family of two adults and two children. Your children would be dependent on your income, which means you would need to account for the money invested in them. Individual applicants of a loan may only need to consider their own monthly expenditure.

First, calculate the total amount of income that your family is able to generate annually, after you have paid your bills and taxes and other commitments such as rent, mortgage, loan repayments, credit card repayment and living expenses. Each family would need to keep aside an amount of money for unforeseen expenditures such as repairs or replacements of electrical appliances, purchase of certain household items and so on.

Once you have a clear picture of your financial condition, you can explore the loan plans. Most financial institutions which offer vehicle finance in Porirua have three types of loans - variable rate, fixed rate or secured car. A secured car loan requires you to pledge the vehicle as collateral for the loan. You would need to understand the interest rates for each type of plan, the available loan terms and how often you want to make your payments. A shorter loan term would result in lesser interest paid, so try to reduce your loan term as much as possible.

Apart from the amount of interest you would have to pay to the non-bank financial institution, you will have to account for other loan related costs such as monthly administration fee, loan establishment fees and so on. You will also need to be able to supply a security deposit while getting the loan, which may either, be refundable or non-refundable depending upon the type of loan you choose.

If you have a bad credit rating and are in need of a car loan, it is best to approach financial institutions like Oxford Finance. They help you through the entire process of arranging a car loan, right from calculating the amount you can borrow to choosing a range of flexible payment options. Once you are financed by the Oxford Community, you will have access to a high standard of customer service throughout the length of your car finance loan. 

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