What is a balloon car loan, you ask? There’s actually no such thing. What you may have been looking for is a balloon payment, which is something that can be added to your car loan.
When people search ‘balloon car loan’ online, often, they’re looking for a car loan provider that offers the option to make a balloon payment. This allows for reduced regular repayments until the end of the loan term, where you pay the larger portion of it all at once.
Balloon loans are also a popular choice for a business car loan because, aside from lower monthly repayments, the company could also have suitable assets to make the final payment.
If the ease of balloon payments sounds appealing to you, you can use CarClarity to complete a car loan comparison and see if it is the best option for your situation.
It’s possible to negotiate the balloon amount with many lenders offering a balloon payment option. If a loan calculator is available, you can use that to give you a rough idea of the monthly payments, including the final balloon payment. You can adjust these calculators and find a structure that suits your situation.
While choosing a balloon car loan payment means lower expenses initially, it can be a good idea to save for the balloon payment for the loan's lifetime. Ideally, you should select a balloon payment that you can comfortably pay out when the loan matures. If you come to the end of the loan and can’t make the final payment, you may need to consider a refinancing car loan.
As soon as you realise you may not be able to make the last payment, you should speak with your lender to find out what your options include – selling the vehicle to make the final balloon payment can be a good option. You can determine the vehicle’s worth after the loan matures and select that amount as your final payment. You can also take on second jobs or work on a side hustle for a while to earn some extra income to help make that last payment.
When choosing a larger balloon payment, you need to note that while your monthly payments are lower, you could pay more in interest. Interest is calculated on the entire amount owed, including the balloon payment. Use the loan calculators available to find a happy medium where you can reduce your payments and interest paid to a suitable amount.
Determining the best car loan for first-time car owners can be challenging without knowing their full financial situation. Some first-time car owners may see the balloon car loan payments as very attractive as it reduces their monthly expenses.
The payment structure in these loans can offer a lot of flexibility. If you have employment where you are not receiving regular income, then the reduced monthly cost of a balloon payment can be ideal. For example, on the weeks (or fortnights) when you receive a paycheck smaller than usual, you can still make your regular car loan payment.
On the other hand, when you earn more than you usually would, you can place additional income into a savings or investment account, which will go towards the final balloon payment. Balloon payments can be the perfect choice for people working in part-time positions or under commission contracts. The lender will determine your suitability, and if they see you as a low risk, they’ll approve you for the loan.
Many people choose a balloon payment as they intend to sell or trade in the vehicle at the end of the loan period. In these situations, the balloon option could also be ideal, as the remaining value on the car can be enough to meet the final payment.
Determining the best car loan for first-time car owners can be challenging without knowing their full financial situation. Some first-time car owners may see the balloon car loan payments as very attractive as it reduces their monthly expenses.
The payment structure in these loans can offer a lot of flexibility. If you have employment where you are not receiving regular income, then the reduced monthly cost of a balloon payment can be ideal. For example, on the weeks (or fortnights) when you receive a paycheck smaller than usual, you can still make your regular car loan payment.
On the other hand, when you earn more than you usually would, you can place additional income into a savings or investment account, which will go towards the final balloon payment. Balloon payments can be the perfect choice for people working in part-time positions or under commission contracts. The lender will determine your suitability, and if they see you as a low risk, they’ll approve you for the loan.
Many people choose a balloon payment as they intend to sell or trade in the vehicle at the end of the loan period. In these situations, the balloon option could also be ideal, as the remaining value on the car can be enough to meet the final payment.
Determining the best car loan for first-time car owners can be challenging without knowing their full financial situation. Some first-time car owners may see the balloon car loan payments as very attractive as it reduces their monthly expenses.
The payment structure in these loans can offer a lot of flexibility. If you have employment where you are not receiving regular income, then the reduced monthly cost of a balloon payment can be ideal. For example, on the weeks (or fortnights) when you receive a paycheck smaller than usual, you can still make your regular car loan payment.
On the other hand, when you earn more than you usually would, you can place additional income into a savings or investment account, which will go towards the final balloon payment. Balloon payments can be the perfect choice for people working in part-time positions or under commission contracts. The lender will determine your suitability, and if they see you as a low risk, they’ll approve you for the loan.
Many people choose a balloon payment as they intend to sell or trade in the vehicle at the end of the loan period. In these situations, the balloon option could also be ideal, as the remaining value on the car can be enough to meet the final payment.
After the loan period has expired, the remaining portion of your balloon car loan payment must be settled, but some options are available. If you want to buy a new vehicle, you can sell your current vehicle and use those funds to make the balloon payment. If you’d like to keep the car attached to the loan, you’ll need to make the payment in cash or apply for a refinancing loan to cover the final amount.
Using CarClarity is the easiest way to find a balloon car loan payment that suits your financial situation. After you enter your details, including how much you’d like to borrow, we’ll match you with a loan from our forty lenders and over a thousand products. Traditional methods for finding car loan finance will take time as you’ll need to visit each lender and look through their products. CarClarity can help cut down this time by completing the checks for you.
If you’re looking for Australian car loans, you can start your search with CarClarity. We have developed the tech that means we can match you with a loan suited to your financial situation. Start your search today!
CarClarity is an online financial comparison service and is owned and operated by CarClarity ACL Pty Ltd ABN 50 606 243 243 / ACN 606 243 243 and Australian Credit License 478 874.
CarClarity provides you access to our expert team who can assist in selecting suitable car loans from our panel of 40+ lenders and over 1000 financial services products. The financial products compared on this website do not necessarily compare all features that may be relevant to you and CarClarity does not compare all rates in market.
All applications are subject to the credit provider’s credit assessment and loan eligibility criteria. Terms, conditions, fees and charges apply. Information provided is factual information only, and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. CarClarity may receive a commission from lenders we recommend.
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