Tips to help arrange (and clear) your car loan

Tips to help arrange (and clear) your car loan

BUDGET PROPERLY. You need more in the bank each month than just for payments on a personal contract purchase. Set money aside for insurance, tax, repairs, extra mileage costs and savings for the balloon payment if you want to own the car.

? CONSIDER YOUR OPTION. Are there other, better ways to borrow the money? For example, unsecured loans or hire purchase agreements, with monthly repayments until the car is owned outright.

CHECK OUT CAR FINANCE DEALS ONLINE. Do this in the comfort of your own home where you can compare offers and scrutinise small print without sales pressure.

DON'T BE SOLD. Buying expensive added extras without

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checking rival offers or considering whether you really need them is a bad idea. You can expect a hard-sell on servicing plans and fabric protection.

IF IT BECOMES TOO MUCH, HAND THE CAR BACK. If repayments become a financial struggle give the car back. But be aware that `voluntary termination' is only possible after 50 percent of the loan, plus any additional costs, have been repaid. You can clear a deal early by paying a `settlement figure'. You can sell the car to meet this payment, but the vehicle may not be worth as much as the outstanding debt.

RENEGOTIATE A LOAN. Rather than skipping repayments, which will negatively affect your personal credit rating, try and renegotiate your terms.

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