Car auto loans
If you are planning to buy a new car, first thing that will come to your mind is how to get the best deal on car loan. Today, dealers also arrange auto-financing for you once you have visited them & have shown interest in a particular model. However, there are a lot of people out there who sincerely believe that if you want the best deal on your car loan, the smart way to go about it is to get a car loan approval from one of the numerous online auto loan companies & then approach a dealer to buy a car.
Get quotes sitting in your home!!
The presence of numerous online auto loan companies have removed geographical constraints as far as looking for that best loan is concerned. Before the birth of these sites, to do comparison shopping among the car loan offers of various loan companies, you were required do undertake considerable legwork visiting one office after another and getting quotes. Now that problem has been completely solved. Just log on to their site, fill in an easy-to-fill, short form and get rate quotes almost instantly. Many sites allow you to compare their rates side-by-side with those offered by others. Or you can simply get quotes from as many loan companies as you want and then compare not only their rates but also the entire fine print of their terms and conditions at your leisure. This allows you to not get fixated by just the lowest rate offered but also compare the entire gamut of the car loan approval and payback process of two or more different auto loan companies. Once you have decided on a particular offer, online presence ensures that you can apply online and your loan will get approved!!
But wait just a minute, we have jumped the gun!! Before getting a car loan, keep in mind if you really want to save your money and really want only the best loan terms, there is some smart pre-planning involved.
Before doing anything else, get your credit score. This again, is very easy to do, thanks to internet. Now you can get your credit report and credit score online at Experian, Equifax or TrueCredit. Don t even visit a dealer without your credit score with you. If your credit score is above 680, rejoice, for you are prime borrower and any loan company will be happy to offer you lowest rates possible for the car loan. If the score is below 680, you are in the sub prime category, and though you will get a car loan easily, you will be paying a higher rate of interest. If however, your credit score is below 550, you will be left with just two options either say goodbye to the car loan, or apply for a bad credit car loan which will have an almost astronomical rate of interest.
However, if your credit score is low, don t lose heart, because there are a number of not-so-difficult steps you can immediately take to improve your credit score. For example, just by paying down your credit card balances as low as possible, and closing a few old credit accounts will improve your credit score. However, never close your oldest account! Taking such simple steps, increasing your score and then applying for the loan so as to get a lower interest rate is always better than applying instantly even with a low score and then getting only very high interest rate offers.
When shopping for auto loans, always look beyond just monthly payments. This is especially true if you are looking at the terms of a car loan offered by a car dealer. Many car dealers will try to focus your attention towards lower monthly installments, while there may be a few hidden charges in their fine print which will take the final amount to be paid by you, towards north. Online car loan websites have the facility of car loan payment calculators. Always use them, for they are useful tools to verify interest rates and final payments.
Always try to make as much down payment as you can afford. Although you may get car loans with no down payment or negligible down payment options, it is always advisable to make at least 20% of the loan amount as down payment. This will help you in bringing down the term of your loan. Get monthly installments fixed keeping in mind that your objective should always be to pay off your loan as quickly as possible so as to avoid paying any more interest than absolutely necessary. So if you can afford to pay off a loan in 36 months, don t extend it to 48 or 60 months, for that simply means higher payment as interest.
Finally, steer co-sign loans offered by the dealers. These straw purchases are usually attempts by smart businessmen to dupe you, and are best avoided. If taking such a co-signed loan is necessary, have both the signatories present and sign the loan at the same time. Also, never ever sign a paper you have not read completely.
Thus, it is clear by now that getting a car loan from an online auto loan company has a number of advantages over car dealer auto financing. Let us quickly recapitulate them point wise.
Ease in getting quotes from a number of companies.
Allows you to do side-by-side comparison of the offers of various online companies.
Provide loan payment calculator, a valuable tool in deciding how much you will be finally paying.
They usually offer lower interest rates and lower APR as compared to car dealer financing.
There usually charge no application fee.
If you have provided all the required info correctly, the loan approval is quick, sometimes within the same working day. Online car financing has no hidden fees and most don t charge any pre-payment penalty.
Thus, before entering a car dealership, have all the info in your folder, right from your current credit score to the loan rates offered to you by companies online. You may take details from the dealer about their financing option, and compare it with what s offered to you online. In all probability, you will find that getting the car loan from an online loan company is a much smarter choice. So get that loam, buy your dream car and drive away.
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