Our Most Commonly Asked Questions & Why They Are Asked.

In the financial services industry, there is a lot of different information available to consumers. Unfortunately, this information varies a great deal depending on its source.  Many providers of financial services such as car finance will tell a client what they want them to hear and will often avoid the truth at all costs. At Revolution Finance, we feel this is not only unfair and morally unacceptable, it also reduces the trust consumers have in our industry. With this in mind, we want to set the record straight and provide our clients with the most accurate and up to date information we can. Below is a list of our most commonly asked questions and the honest answers.

What is the interest rate?

This question gets asked a lot and for obvious reasons. People want to know how much the loan is going to cost them and the interest rate plays a significant role in determining this. Given the importance of the interest rate, clients should not need to ask this question though. It should be one of the first things your consultant discusses with you. Unfortunately, many providers of car loans avoid discussing interest rate in order to increase their commission (by selling a higher rate) or to simply have the client use their product, despite it not being competitive. Car dealerships love avoiding the rate discussion and will try and sell a ‘repayment’. Whilst comparing repayments is a great way to ensure you are getting the best deal, it is vital to ensure you are comparing apples with apples (such as loan term, fees and balloon payments).

What effect will the application have on my credit rating?

Regardless of what any other provider tells you, a car loan application will have a negative impact on your credit file. The impact will be minor and if it is only one application it will not have a negative influence on your ability to obtain credit in the future. The only time a car loan application becomes significantly negative is if your consultant carelessly submits multiple applications to multiple lenders. This will result in numerous credit enquiries and the combination of these enquiries in a short period of time will be detrimental to your credit rating. The moral of the story is to ensure your broker, consultant or lender only submits one application to one lender. If a new application is required (which can happen), the consultant must get your approval prior to submission.

What are the establishment fees?

Establishment fees will vary from lender to lender and from provider to provider. There are a few things to look out for here however. When using a broker or car dealership, an ‘origination’ fee will almost always be charged in addition to the lenders establishment fee. This origination fee will vary from $250 to $1,000 and is typically financed into the loan. At Revolution, we almost always include a fee for our services and this will be disclosed to you. All our quotes and pre-approvals are inclusive of our origination fee. Be mindful of this fee when dealing with finance providers as some will quote without this fee included.

What next?

This question covers a vast range of misconceptions or mistruths in the financial services industry. Once pre-approved, clients often want to know what happens next and what the timeline looks like until the process is finalised. There are a few important things to look out for her. First, many brokers and dealers will put a time constraint on your approval. For example, they may tell you your approval expires in 14 days in order to create some urgency and get you to make a buying decision. Whilst some lenders will give an expiry for pre-approval, it is rarely 14 days and it is always easy to reinstate the pre-approval provided your circumstances don’t change. If a broker or dealer tries to rush you, they do not have your best interests in mind. Second, clients often ask what happens next because their consultant fails to educate them on the process. Your broker should be upfront and honest about what you need to do and what they will take care of. Get realistic timeframes from your consultant and hold them to it – it’s the least you deserve!

Give Revolution a Shot

At Revolution Finance we want to change the way clients are treated and change public perceptions while doing so. We believe in providing an honest, affordable and reliable service to our clients and would welcome the opportunity to help you out. Give us a call today on 1300 882 851 or submit an enquiry online today.