Get the car loan you need
Many thing have changed in the Automobile and Banking industries lately But that doesn’t mean that a car loan is no longer available to you.
Institutions have become a lot more careful who they loan money to, but that’s not necessarily a bad thing. Look around, interest rates have come way down in some cases I’ve seen 0% APR.
These are loans made directly from the auto-makers or entities of the automakers which are used to entice buyers to make their purchase. Still their a lot more careful about who they give a loan to.
For a long time loans were going to those barely able to afford them and like the Banking Industry they got caught short when those loans started to default.
Does this mean that you wont be able to get a loan if your credit history is less than stellar, of coarse not, it just means that lenders are a lot more cautious and you should be too.
Before you even consider buying a new car you need to be Honest enough to ask yourself some tough questions like:
*what are your finances currently like.
*what about your Job, are you expecting a raise or promotions anytime soon or is there a chance of layoff.
*what kind of car do you need or want, looking for some simple transportation, or are you looking more for luxury or maybe even something sporty.
Keep in mind that these factors will effect not only the price of the car, but also the price of the loan in the form of interest. Remember even though the car dealers are somewhat desperate to sell cars they are well aware of the difference between the car your need for transportation, and the car you really want.
If your buying what you need (basic transportation) they no your desire is not as great, so you can probably work out a much better deal on both Car and loan. But if it’s a car you really want or desire (like luxury or Sporty) their usually more popular so they won’t be so willing to give away the house to get you to buy.
But now were getting off track, how to deal with dealers is another article altogether.
Back to car loans. There are several thing you should take into account and look for when applying for a loan.
First your credit history will always have a bearing on the loan your offered. Poor or average credit doesn’t mean you’ll be denied credit, but it will probably mean higher interest rates.
Shop around, compare rates, the difference between one lender and another can be significant and there is no sense paying anymore than you have to.
You need to check the loan offer very carefully and watch out for prepayment penalties. Meaning the lender will charge a fee if you pay the loan off early, you’ll find you may want to refinance for a lower interest rate later or come into some extra money and want to pay off the loan and find your suddenly hit with a substantial penalty.
No matter what you should not take a loane with a prepayment penalty, also make sure the loan is a simple interest loan, nothing fancy no amortized or balloon loans, and even stay away from variable rate loans, The current problems won’t last forever and when their over interest rate will rise.
Remember to have the lender go over the following before you sign anything. You need to know the interest rate on the loan along with the type of loan. you shold also know the number of months of the loan and how much of a down payment is required.
You may get the best deal from the dealer through the manufacturer, but don’t count on that be sure to shop around for the best deal. If a lender (especially these days) can’t give you a deal that you can afford or accept, leave and go somewhere else if your prepared to do that you’ll eventually get a deal you can live with.
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