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How Much Can I Borrow?

This question is not as simple as it seems, as what is going to have the most bearing on how much you can afford to borrow, is the maximum repayment that will fit within the affordability calculations of the motor financiers.

You most likely have a set budget in mind in regards to how much you are comfortable repaying for your car loan.

Your personal car loan repayment budget may not always be allowable by the motor financier, dependent on their own affordability calculations and other policies and guidelines.

Which Lender?

Each motor financier may have a different calculation for affordability, so you may be able to afford a higher repayment with certain lenders, and this can have an impact on your maximum borrow amount.

Maximum Loan Term Allowable

The next thing to consider is what the maximum loan duration that the motor financier will allow.

The most common maximum allowable car loan term is 5 years, but there may be some options to find a 7 year car loan.

The longer the loan term, the lower your repayment will be, and this can mean you may be able to afford borrowing more for your car loan.

Age Of The Vehicle Purchase

The actual age of the vehicle you are looking at purchasing could also have some effect on what the maximum loan term could be, and the most common age of vehicle by motor financiers is that it should be no older than 15 years old at the end of the loan term you have requested.

Interest Rate, Fees & Charges

As the car loan interest rate, fees and charges can change your repayment, the lower these features cost, the lower your repayment will be, which could get you additional funds depending on what loan term you can opt for.

Income And Expenses

Of course your own level of income and outgoings is going to leave you with a certain level of surplus funds for a car loan. This is going to have the biggest effect on how much you can afford to borrow and will be unique to each individual applicant.

The Best Way To Work This Out?

You should speak to a professional car finance broker like CarLoans.co.nz who have multiple lenders and can quickly calculate what you can afford to borrow based on your own circumstances.