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Key Factors That Affect How Much You Can Borrow
- Your Income and Expenses: Lenders will look at your monthly income, minus living expenses, to determine how much you can comfortably repay.
- Your Credit Score: A good credit history can increase your borrowing power and help you secure lower interest rates.
- Loan Term: Longer terms may lower monthly repayments but could increase the total interest paid.
- Deposit Size: A larger deposit means you will need to borrow less, making approval easier.
- The Vehicle Itself: Lenders often prefer newer vehicles, as they hold value longer.
How a Perth Finance Broker Can Help
A car finance broker in Perth can:
- Compare options from multiple lenders
- Calculate your borrowing power accurately
- Find competitive car loan rates to match your budget
Quick Borrowing Power Estimate
While every lender’s criteria differ, a general rule is you can borrow an amount where your repayments do not exceed 20 to 30 percent of your monthly income. For example:
- Monthly income: $5,000
- Comfortable repayment range: $1,000 to $1,500 per month
From here, a broker can run the numbers to show exactly what this translates to in car loans.
Final tip: Do not just focus on the maximum you can borrow. Focus on what is comfortable for your lifestyle. An experienced Perth finance broker can help you secure the right loan amount and avoid financial stress.
