For some people, cars are just a way to get from one place to another, and they don’t give them any more thought. For others, they are much more than that. New cars are hallmarks of social status, a showcase of their aesthetic taste, luxury, and comfort. However, when it comes to cars – just like with every other pricy item – you usually need to get a loan before getting one. You’re not the only one who gets a headache just thinking about it, so stay with us and write down some tips on how to get the best car loan you possibly can.
Draft a detailed plan
Every once in a while, we find ourselves at a point in life when we have to invest a lot of money into something that makes our lives easier. Buying a new car is no different, and it involves a great deal of planning and research. You should assess your situation realistically; you want to satisfy all your requirements without breaking the bank.
Write everything down on a piece of paper, including your salary, the price of the car you want to buy, the monthly rate of a loan you’re hoping for, its down payment and interest rate, as well as the payment period. You can never have too much information, so make sure to include everything that sums up into a total cost at the end of the term.
Check your credit score
Credit score plays the most important part in getting a good car loan. You might have a tricky time with it if it’s not perfect, but don’t worry, as it’s possible to find companies that give amazing low interest car loans even with a bad credit score. If you tend to pay your bills on time, make payments in full, and avoid getting new credits, you should be safe and sound. If not, you can get your report from one of the credit reporting bodies. Based on the report, you can fine-tune your plan and make a few changes to your wishes where necessary.
How to get a car loan without a good credit score?
One of the downsides that a bad credit score carries with itself is a higher APR, so you have to look for the best possible deal, which is the lowest APR over the shortest amount of time. If there isn’t an APR low enough, you should consider looking for another car. Also, you can bring a friend who will act as a co-signer for your loan contract, as that gives your lender ease of mind. You could also get a lower interest rate that way!
Should you get a car loan or a dealer finance?
The first thing you should know if you decide to get your loan from a bank is that some banks have limits on a car’s age and mileage, so you could find yourself trapped in a high-interest rate if you’re buying a used car. Also, they will thoroughly check your credit card score and fully analyze the credit report before determining your rates. One of the benefits is that the rate offer you get from a bank will be your true interest rate without any hidden meanings and passages.
Dealers function the same way banks do; they just send your information to several lenders at the same time and come back to you with the best offers. However, when getting a loan through a dealer, you’re vulnerable to some hidden costs that may be disguised as a buy rate and other fees. If you can get a pre-approved loan at a bank and negotiate with it at a dealer’s place, you might get an even better offer.
Find a trustworthy lender
You can do a few things to make sure you find a reliable lender. The easiest path you could take is to talk to people you know and ask for their experiences. Also, make sure to read through reviews on trusted websites, as you can find a plethora of information there. You can also get a good idea of a lender by scrolling down his page. Pay attention to high-interest rates, add-on products that can increase the amount of your loan without any benefits, and be wary of yo-yo and other scams.
In the end, getting the best deal for your needs calls for days of shopping around, comparing, researching, and consulting. Important decisions such as this one shouldn’t be made in a hurry just for the sake of your comfort and practicality, as they could bring your many inconveniences.