Interest Rates On Automobile Loans

Jan 31, 2011 by النابض · 0

By Lucille Green


An auto loan is one specifically designed for car purchase and is becoming an increasingly popular method for people who do not wish to take out a personal loan. If you haven't used a loan like this before, it is a great way to fund a car because it is secured by a lien on the vehicle being purchased,as each payment is made, the amount owed reduces so there is less at risk if something untoward happens. First off you need to decide how much you can afford and once that has been decided it is just a matter of spending some time on the Internet to find a suitable car at the right price.

The great thing about the Internet is you can browse to your hearts content and look at hundreds of cars without leaving home which has got to be simpler and more cost effective than driving from one car dealership to another. If you are determined on a particular new model which is outside your budget, then there is no reason why you cannot buy a used version because this type of loan is fine for used vehicles as well. Despite the ease with auto loans can be obtained, they can be refused if the applicant has a bad credit record so check to make sure there aren't any problems first.

Having a poor credit history does not automatically bar your from having a loan but it normally affects the interest rate you will be charged. It is advisable to only apply for finance if you score is above 550 so if it is not then first repair your credit score and then apply. There are many resources through which you can get auto loans like dealers, credit union, bank, or online lender and it is better to shop around first before you take your loan.

You have to keep a few factors in mind when checking out these rates including the fact that someone offering a very low cost now does not necessarily mean it is the best deal. Be careful how long you intend to pay for the car for and do not automatically choose the low cost option as many people find that after a couple of years they still owe far more than the car is worth. An insurance policy will often lower the interest rates on a loan,lenders worry that if something happens to you they may not get their money back so if you are insured already it is better that you know all the details.

If you are getting additional rebates in exchange for you financing through the car dealer, then you should take their car financing deal,however, there is nothing stopping your from applying for finance at a lower interest rate online once you have received the rebate. Many lenders exist and often charge for arranging a loan, including a down payment but two online companies do not: Capital One Auto Finance and E-Loans. Some dealers will even match the quotes with those that are supplied by online lenders so you may be able to negotiate with the car dealer directly.




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