Does a loan calculator estimate business car finance?
In response to the ‘on demand’ market and utilising current technology, many motor vehicle lenders provide a car loan calculator on their website. Banks, finance companies, finance brokers such as Jade Car Loans and even motor vehicle manufacturers and dealers provide online calculators on their websites.
The Jade Car Loans calculator suitable for calculating both personal car loans and business motor vehicle finance estimates – but there are a few differences in using the calculator for these purposes. We explain.
Business Vehicle Finance v Personal Car Loans
- Personal car loans have quite a simple structure so when using a calculator the user only has to select their loan term and loan amount, enter the current interest rate we offer and they receive a monthly repayment estimate.
- Business vehicle finance include the additional element of the option of a balloon or residual amount. This is a portion of the overall loan amount that the borrower pays at the end of the loan term. It is represented as a percentage of the total loan amount.
- Chattel Mortgage and CHP have a balloon and for Car Leasing it is referred to as the residual.
- The calculator includes a field to include the balloon or residual for business vehicle finance, in addition to the loan term and loan amount.
- The interest rate that we offer on personal car loans is different from the rate we offer on business finance. When using the calculator for business car loan estimates, ensure that you enter the correct interest rate. We advertise our current rates on our home page.
Calculating Business Car Loan Estimates
Using the Jade Car Loans calculator to receive rough estimates on monthly repayments is an easy process but the result displayed should be considered in context and within the capabilities of the device.
- Your start by entering the total loan amount. In the case of most business car loans this can usually be 100% of the total purchase price as most lenders do not request a deposit to be paid on commercial finance products for new cars.
- Individual lenders do have minimum car loan amounts. You will see these displayed on many bank websites where they detail their car loan conditions. If you are requiring car finance on a relatively small amount, say to finance a balloon/residual, a quick call to Jade Car Loans and one of our consultants can clarify if the loan amount you are requesting is achievable.
- The total loan amount should include the balloon/residual as that will be deducted by the calculator as part of the calculation process.
- Enter the interest rate that Jade Car Loans is currently offering for business cars. You’ll note it is lower than our personal car loan rate.
- In entering the loan term, be mindful that many lenders will have a maximum term. This is usually up to 5 years/60 months.
- If you are opting for a balloon/residual, enter the amount/percentage that you would like. Once again, some of our lenders may have guidelines around maximum balloons and residuals may be set by ATO rulings. But for the purpose of receiving a rough ballpark estimate, enter the amount that suits your requirements.
- The calculator will automatically deduct the balloon/residual from the total loan amount and display a monthly repayment estimate based on the balance.
- The larger the balloon/residual, the lower the monthly repayments and vice versa.
- By varying the balloon and keeping the same loan term you can see how the repayment amount changes.
Keep in Mind….
As with all generic devices, loan calculators have their own limitations. They do not have the functionality to predict the fees and charges on a loan to any specific individual or business by any particular lender. If you have previous experience in motor vehicle finance, if you have had other loans, you may have a rough idea of charges and you may choose to add extra to the loan amount to allow for these.
They also can’t predict how successful your Jade consultant will be in negotiating a better interest rate on your finance deal or how lenders will view your business credit profile when making a car finance offer. The monthly repayment that we achieve for your business car finance may differ from the result displayed by the calculator.
Remember that the total loan amount will be the monthly repayments times the number of months plus the balloon/residual including interest.
The calculator is great for making decisions on different priced vehicles and for providing estimates for your business forecasts and budgets in preparation for purchase. In addition, the calculator is particularly useful in allowing business operators to start structuring their loan in preparation to brief a Jade consultant.
We encourage our customers to make full use of our car loan calculator and especially to have it ready on their mobile device when discussing price with the car seller. While you’re negotiating the purchase price of the vehicle you can also be calculating rough repayment estimates.
For a firm quote on your business vehicle finance, simply call Jade and one of our consultants will assist you.
Head to our loan calculator page to start estimating or for a firm quote, speak with a Jade Car Loans consultant 1300 000 003
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