AA Car Finance

AA car finance offers Kiwis flexible loan options to help them achieve their car buying goals. They also allow you to make overpayments without penalty fees and give you the option of choosing whether this reduces your monthly repayments or shortens your loan term.

AA is most well-known for its breakdown cover but it does more than that, including acting as a credit broker for unsecured personal loans provided by Bank of Ireland UK.
Flexible loan options

AA offers a range of flexible loan options. Borrowers can choose a fixed or variable rate, and there’s no application fee. They also have the option to make overpayments without paying any penalty fees. Overpayments can be used to lower monthly repayments or reduce the loan term. This is a great feature as many lenders only offer one of these options.

Applicants can check their eligibility for a loan before submitting a formal application. This is done via a soft credit check and won’t affect your credit score. Once they’ve been approved, borrowers can expect the funds to be transferred into their account within two working days.

AA offers loans between PS1,000 and PS40,000. This money can be used for a variety of purposes, including buying a car, wedding, home improvement and debt consolidation. AA members get a discount on their rate, and non-members can take advantage of 12 months free basic breakdown cover. It’s important to compare the total cost of borrowing, which includes all charges over the loan term.
No penalty fees for overpayments

If you’re an AA loan customer, you can make overpayments to reduce the amount you borrow. However, it’s worth bearing in mind that this will increase the overall amount of interest you pay.

You can check your eligibility for an AA car finance loan using their eligibility tool before you make a formal application. This will involve a soft credit check, which won’t affect your credit score.

AA offers loans up to PS40,000 with repayment terms between one and seven years. This is a relatively high maximum loan limit, although they do have some extra requirements. For example, you’ll need to be employed or self-employed to qualify for a loan of this size. You’ll also need to meet their income and annual spending criteria. If you’re a new customer, you can get an initial pre-approval, which will give you an idea of how much you can borrow. You can then use this to find a deal from a dealer.
You can settle your loan early

You can settle your loan early with AA, but you will be charged an early settlement fee. This fee is a percentage of the outstanding balance on your agreement. The exact rate can be found on your contract and it is based on the lender’s assessment of your personal circumstances, the amount borrowed and the length of the term.

If you are struggling to keep up with your car payments, it’s worth getting free, confidential debt advice. This may help you avoid missing payments that will impact your credit file and make it harder to get future loans in the future.

You can check whether you are likely to be accepted for a loan before formally applying by using the AA’s eligibility calculator. This uses a soft credit check that won’t affect your credit score. You can then apply online and, if approved, receive your loan documents electronically or by post. This can save you time as it means you won’t have to visit a branch.
You can’t get a joint loan

If you are applying for a car loan with a co-borrower, the lender will look at both of your credit scores to determine eligibility. This is because co-borrowers take on equal responsibility for the car loan payments. However, it’s important to remember that being a co-borrower can negatively impact your credit score if you don’t make your monthly repayments.

The lender will also factor in your debt-to-income ratio when assessing your application. Adding another car loan to your debt-to-income ratio will increase it, so this needs to be carefully considered.

It’s also worth noting that if your relationship ends or you decide to sell the car, it’s possible to remove the other borrower from the agreement. This will require a new credit check and might change the interest rate. However, it’s a common option for people who have joint car loans when circumstances change. It’s important to discuss your options with the other party and to work out a mutually beneficial arrangement.

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