Optional Final Payment on Car Finance: What Does It Mean?
What does optional final payment mean on car finance
When you take out a car finance agreement, there are a number of different things that will be included in the contract. One of these is what is known as an “optional final payment.” This is exactly what it sounds like – it’s an optional payment that you can make at the end of the agreement if you choose to. In this blog post, we’ll explain what this means and what factors you need to consider when making your decision.
What is an optional final payment on car finance and what does it mean for you as the borrower?
Car finance agreements commonly include what is known as an optional final payment, which allows you to make a lump sum at the end of your agreement. This payment can be used for either the full settlement of the vehicle or part settlement if applicable.
The amount due to settle the optional final payment would be based on what is agreed upon in your car finance agreement and what was made available when you took out the loan. The size of this optional final payment will depend on several factors such as how much you borrowed, what type of loan product you opted for, what interest rate was applied, and what terms were agreed upon with your lender.
When looking into taking out a car finance loan it’s important to understand what is included in your agreement, so that you can make the right choice for yourself.
How can you budget for this extra payment and ensure that it doesn’t impact your other financial goals?
Optional Final Payment on car finance refers to the final payment you make at the end of your loan term. It is an optional payment because it can be waived or paid off in full. This type of financing has become increasingly popular in recent years due to its flexibility and affordability.
Typically, when you take out a car loan, there will be what is known as a balloon payment required at the end of the term. This amount is usually higher than what you’ve been paying on a regular basis and could potentially cause financial strain if not planned for properly. With optional final payment, however, you can waive this additional amount if need be with no penalty or extra cost – making it an attractive option for those who are looking to purchase a car but are unsure what their financial situation may be in the future.
In order to budget for your optional final payment and ensure it doesn’t impact your other financial goals, it’s best to start by understanding what the additional payment may be.