Unless you’ve been stockpiling cash under your mattress (not recommended) for a while, the chances are that you’ll have to finance your next vehicle purchase. Even though car loans have become a part of the entire shopping experience, not everyone knows how to find the best deal. Here are a few tips to ensure you get the deal when shopping for car loans:
Review Your Credit Score
In general, the higher your credit score, the lower rate you’ll get on your loan. A good score is typically based on your history of paying bills on time. It’s wise to check your credit score a few months before starting your car search. Many banks or credit cards offer free programs to see your score. Otherwise, you can request your score online. Reviewing your score early means you have time to fix it. You can pay off any high-balance credit cards, get bills paid on time, and even report any discrepancies that can improve your score.
Set Your Budget
It’s easy to get swept away when shopping for car loans. Auto dealerships have highly trained sales teams who know how to upsell you on accessories, higher-level trims, and more. Resist the urge to buy bigger and better and stick to your budget. How much you request in your loan can impact your terms, interest rates, or approval. Part of getting a good car loan is not only focusing on the monthly price of your car. This is definitely one area to consider, and you should know what you can afford each month before getting too far in the process.
It’s Ok To Shop Around
Getting a great rate on your car loans means doing a little extra work. There’s nothing wrong with shopping around for a great loan deal. There are plenty of places that offer loans, so it may be worth checking out a few options before you start shopping. Your local bank or credit union should offer auto loan options. They make you jump through a few hoops, but the process is overall painless. These institutions often require that you have an active account with their companies, set up an autopay, etc. Car dealerships can also help you find the right car loans for your needs. From full-fledged lending sites to buy here pay here programs, you’ll often find more flexibility from a dealership in the industry from the bank. If you have the time, there’s nothing wrong with checking with others to find a great deal.
Compare Apples to Apples
It’s easy for various lenders to offer different terms that are misleading during comparisons. One place may have a higher interest rate but a lower monthly payment over a longer period of time. Another might offer a great low rate but require but higher payment. The important part is that when you compare different loans, make sure they give you the same information for each. This quick comparison is the most efficient way to ensure you’re seeing the entire story.
Car Loans Are Closer Than You Think
Finding a great deal on a car loan isn’t as hard as it used to be. The internet, word-of-mouth referrals, and just chatting with your friends can help you find excellent leads. Even if you have bad credit, there are still car loans for you. You can even rebuild your credit back to its former glory by making payments on time. While there are plenty of places hoping to get your business, it’s always worth getting an offer from someone who knows the industry: dealerships. Luckily, you have options. The best time to start your search for the perfect auto loan is right now.
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