It is every one’s cherished ambition to drive his or her own dream car someday. But the present generation has new ideas on how to buy cars. Instead of slogging for a lifetime to save up money and buy a car someday when they cannot drive it properly, most people are opting for auto loans from various auto loan lenders to finance their car purchase. This is a good idea, considering the numerous beneficial loan schemes that auto loan lenders are coming up with. But yes, it is a tricky task to calculate auto loans that would suit your purse as well as get the lender’s nod. Auto loan interest calculators are easy tools to figure out a rough estimate of auto loan interest rates and term of loan before the fine-tuning.
Factors that determine the rate of interest
Between the auto loan lenders and the borrower, there are many different perspectives or factors that ultimately decide the auto loan interest rates. It is easy to start off and calculate auto loan figures with the free auto loan interest calculator that most auto loan lenders have on their web sites. These auto loan interest calculators can be used directly by the borrower and he comes under no obligation.
- Type of vehicle: obviously, the interest rate on a luxury car might be higher than a small car. The rates on an SUV might differ from those on a sports car and so on.
- Market and resale value of car: to calculate auto loan, lenders and borrowers need to look at the market value of a car. In fact, used high quality cars from good auctions come for low price but go for high resale value. Thus, even if the borrower is unable to pay off the debt, the resale returns high revenue to the lender. Hence, low rates can be applied on loans for used cars. New cars have higher auto loan interest rates.
- Down payment and amortization schedule: if the borrower is making a good down payment like 15%, then the lenders are assured of a good investment and agree on low rates. The number of installments also affects the rates of interest.
- Credit score: a good credit score on s standard like the FICO can increase the applicant’s chances of getting a faster approval with low interest rate. Credit scores predict the chances of a timely and full repayment of the loan by the borrower. While there are bad credit loans, the rates might be slightly higher.
Compare and contrast quotes
from these sources, the borrower can pick out a suitable scheme most likely to get the fastest approval. Refinancing is another good idea. After picking out suitable financial source for the loan, the borrower has to pick out the reliable and reputed lender with a good track record and customer help section for those in need of advice. After getting auto loan interest ratesAuto loan interest rates, the type of loan being sanctioned, the extent of financing must all be considered while making the choice. Most auto web sites have their own auto loan interest calculators that compare quotes from different lenders.