A car loan is one of the largest loans that an individual generally takes. As such, car loans carry high values and longer paying periods than most loans apart from mortgages. Since the principal value of a car loan is generally high, even a small difference in the rate of interest can save you a substantial amount of money. Apart from this, you can also end up saving on your car loan by looking for lower or no processing and handling fees etcetera. Getting a good car loan is not a matter of chance but of choice, and one should definitely prepare and work for getting a much better car loan that what you would get while at your car dealer’s. Some tips that will help you find a better loan for your new car are:
Improve Your Credit History: An extremely important thing that influences whether you will get a good car loan or not is your credit history. Nowadays, even bankruptcy and bad credit cases can get loans easily but these loans are extremely costly and carry certain conditions that are too strict for most people to adhere to. The amount of loan that you will be able to get, the repayment period and the APR are all crucially dependent on your credit score. The better your credit score, the higher is the amount that you can borrow at a lower price. So if you are planning to buy a car next year, then start improving your credit score now. If you have a good credit score now, then go for that auto loan right now instead of waiting till next year.
Do Not Get Your Car Financed At The Dealer: There is a large probability that the dealer where you buy your car from offers financing as well. While some dealers might actually offer you very good deals, in most cases, car loans offered through dealers carry a higher rate of interest and more terms and conditions than you would get elsewhere. If you want car finance, better approach a financing company.
Shop Around: The extreme competition in the area of financing has led to a wide variance in the kind of loans that can be offered to the same person. Different companies can give you different rates and different repayment terms with the same credit score and income. So do not go for the first loan that you are offered, instead get quotes from at least three to five firms before finally deciding on which loan to take.
Get Online: The internet has become the largest marketplace in the world and for good reason too. This is because everything on the internet is cheaper than what can be found in brick and mortar establishments and this applies to loans too. Internet based financing companies do not have to pay salaries to hordes of sales people or rent out grand offices and most companies pass on their savings to their customers. You will be able to find car loans that are cheaper and have better terms with online companies than you would find otherwise. Just make sure that you go for a company that has a good reputation and sound backing.