5 Questions to Ask Before You Apply for a Car Loan Recommended by Sherlock Loans

Getting a new set of wheels is exciting, but rushing into a car loan without doing your homework can cost you more than you expect. Whether it’s your first time applying or you’re shopping for a better deal, asking the right questions upfront can save you thousands and help you feel more in control of the process.

At Sherlock Loans, we believe that informed borrowers make smarter choices. Here are five key questions to ask before you hit “apply”.

1. How Much Can I Comfortably Afford to Repay?

It’s easy to focus on the car’s price tag, but what matters most is how the repayments will fit into your monthly budget. Consider all your regular expenses such as rent, groceries, insurance, and savings, and then work out what you can realistically afford to repay each month without stress.

A good broker (like us!) will help you understand your borrowing limits and match you with a lender whose terms suit your lifestyle.

2. What’s the Total Cost of the Loan?

Many borrowers only look at the interest rate — but that’s just one piece of the puzzle. Ask about what fees and charges are involved to give you a clearer picture of the loan’s total cost.

Also consider extras like early exit fees, monthly account fees, and dealer finance charges. At Sherlock Loans, we break it all down so there are no surprises.

3. Should I Choose a Fixed or Variable Rate?

With a fixed-rate car loan, your repayments stay the same over the term which is ideal for budgeting. A variable-rate loan may offer more flexibility but could rise (or fall) with interest rate changes.

There’s no one-size-fits-all answer, which is why working with a broker gives you an advantage. We compare both options across multiple lenders to help you choose the best fit for your situation.

4. Do I Want to Own the Car Outright?

It’s important to think long-term. Do you want to own the car outright at the end of the loan term or would you prefer to trade in regularly and upgrade?

Some loans include balloon payments, which lower your monthly repayments but require a larger lump sum at the end. We’ll help you decide if that structure makes sense for your needs or if a more traditional repayment plan is smarter.

5. Should I Go Through a Broker or a Bank?

Going straight to your bank might feel like the safe choice, but it limits your options. A broker like Sherlock Loans compares offers from many different lenders to find you a more competitive deal, often with faster approval and better terms.

We don’t work for the bank. We work for you.

💡 Final Thoughts With Sherlock Loans

A car loan is a big financial commitment, but it doesn’t have to be overwhelming. By asking the right questions, and getting expert support from Sherlock Loans, you’ll be in the driver’s seat, confident you’re making the right call.

Ready to take the next step?

Click to get started online or speak with a real broker who listens.