If you are someone about to begin
seeking out a loan for the purchase of a new car you are going to see that
there is a wide array of interest rates being offered. Why are new car loan
rates all over the map? How is it that one person can get a loan at 3.9% and
someone else is hit with a staggering 6% or more?
Generally all loans are shaped by
a few individual factors connected directly to the borrowers. For example, the
amount of the down payment, the credit history, and the current income will all
have an effect upon rates and the terms offered. Additionally, the shorter the
term of a loan the lower the interest rate charged.
Those who are fortunate enough to
get the lowest new car loan rates tend to be people with good to excellent
credit histories and scores. This is not to say that these are only people in
higher income brackets because that is not the case, it is simply a matter of a
consumer having no history of late payments, maxed out credit cards, or
defaults on any bills or debts. A “clean” report coupled with a high
score is usually the simplest way to get the best rates.
Additionally, the borrowers that
get the best rates tend to also have a bit of cash to offer as a down payment
on the loan, and they might also elect to use a much shorter term, such as
three years, to pay off their debt. Obviously, not all consumers will meet such
criteria, and this is usually the reason that rates can vary quite dramatically
from person to person.
Those who receive far less
favorable new car loan rates tend to be consumers with damaged credit or a low
score. This might be due to everything from bankruptcy or foreclosure to lots
of defaults on credit accounts, and anything that the individual can do to
improve their report and resulting credit score must be done immediately.
In addition to working very hard
at cleaning up the credit report, a consumer with poor credit should also try
to save some money in advance of obtaining the loan. This is because, as
demonstrated a bit earlier, lenders tend to offer better new car loan rates to
those who can offset some of the risk by presenting a bit of the cash at the
time of purchase.… Read more
If you are in the market for a
new auto loan then the following tips will enable you to get the best deal.
Getting financing for a new car highly depends on your credit score and the
terms and conditions of the lender. It is important to shop around as well as
come up with a budget of the amount you can comfortably afford to be paying off
every month. You also want to get the lowest interest rates possible as these
affect your monthly repayments. You should be able to get the sleek new car you
have been wanting and there are many lenders willing to provide you with an
auto loan to make this wish come true.
The first step in the process of
getting a new auto loan is to find out your credit score by obtaining a free
copy of your credit report. Make sure that the information on your credit
report is accurate as this will determine the kind of deal you get. You will
find that most lenders will offer the lowest interest rates to those with a
good credit rating. If your credit score is low you may opt to improve it first
before seeking financing but even with your poor score you will still be able
to get financing for a new car but with just slightly higher interest rates.
Obtaining financing for a new
auto loan from a bank or credit union can mean additional work and so you may
opt to go directly to a dealer. The convenience of a dealer means that you get
financing and purchase your vehicle all from one central place. Many dealers
will offer deals but it is important that you shop around and compare the
prices of different dealers so that you get a good deal. However you should be
aware that most dealers get financing from banks or credit unions and so their
rates will be slightly higher than those of the lending institution.
If you want to save a little on
your new auto loan you should think about getting financing directly from a
bank or credit union or another lending institution. A dealer is sort of like a
middleman and so by cutting him out you save up a little. You will find that
banks, credit unions and other lending institutions offer some of the best
interest rates as compared to dealers. However you do need to shop around and
compare interest rates, terms and conditions of each lender as this will enable
you get the best deal.… Read more