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Auto loan rates

In an ideal scenario car loans make it easy for anyone with a source of income to purchase an automobile. If experts are to be believed with easy financing and little or no down payment, its easy to get carried away and purchase a car with a sticker price beyond what you can easily afford. However, fact remained that as you may later realize, paying the repayment installments can strain your budget. Theoretically speaking the amount you pay every month depends on the interest rate on your car loan that you have agreed to pay.

There is no hiding the fact that the Internet has become a great resource to car shoppers, making it easy for them to gather all the information required to help find the right vehicle at a fair price. In addition there are several auto loan rates sites that make it easy to apply for an auto loan. However, more often than not it's likely that you will get a lower car loan interest rate than the car makers captive finance company, credit unions and banks.

It is worth mentioning in this regard that depending on the model of the car, your credit history and the down payment you are willing to make, you can get a car loan with interest rates ranging from 0 per cent to 12 per cent. Point to be noted in this regard is that car makers captive finance companies often offer interest free loans or low interest loans to clear inventory or push the sales of slow moving vehicles. However, always remember that low interest loans are not available on all models.

On the other side of the coin if you approach a bank for a car loan, you can expect to be charged an interest rate between 5 to 12 percent. At the present juncture, the average rate for a auto loan rates for the purchase of a new car with a term of 48 months is 6.5 percent and the average rate for used car loans is 7.25 percent. There is no denying that auto loan interest rates are generally higher compared to mortgages because automobiles depreciate rapidly in value and the delinquency rate of such loans is higher.

To make the most of a car loan, it is of utmost significance that you should make a large

down payment, if possible, and keep the term of the auto loan rates short. Theoretically speaking cars depreciate quickly in value and you are not likely to get a good price if you decide to exit the auto loan earlier than your term. On the other side of the coin if your loan term is long, you might find that you owe the company more than the present market value of your car in the resale market.

If experts are to be believed with a little bit of patience and research, individuals in the market for a new or used car loan can find low rate financing. Fact remained that when it comes to financing a car, the interest rate is very important. In case if your credit is bad, a higher rate may greatly increase your monthly payments. There is no denying that in some instances, a high interest rate makes it more difficult to afford a new or used car. However, in an ideal scenario several factors can improve your odds of getting a cheap auto loan.

Compare Dealership Financing and Private Financing

Believe it or not there are several financing options available to car buyers. For the most part, it is worthwhile remembering that credit history will determine the type of loan packages and lenders you may use. In simple terms getting a car loan is simple, and most people will qualify. However, fact remained that for the best car rate, it is important to select the right lender.

In case if purchasing a vehicle from a car dealership, the dealership will offer a finance package. However, it is worth noting that car buyers may qualify for better rates. In quite a number of cases, dealerships will increase the interest rate on a vehicle in order to put more money in their pockets. And thats where to avoid paying potentially higher rates, it helps to also obtain auto loan quotes from private lenders. In an ideal scenario these include credit unions, local banks, sub prime lenders, etc.

Maintain a High Credit Rating

Believe it or not it's no secret that individuals with higher credit ratings obtain better financing rates. With this said, it is worthwhile remembering that improving your credit prior to applying for an auto loan may save you money. On the other hand increasing credit score involves making regular monthly payments. Furthermore missing a single payment to creditors may decrease your score by ten points. If possible, it is advisable to attempt to reduce debt to income ratio, and avoid acquiring too many lines of credit. Aside from overextending yourself, there is no denying that the credit inquiries will hurt your credit score.

Compare Auto Loan Quotes Using a Broker

In case if electing to secure private financing, use an auto loan broker. It is worth mentioning in this regard that brokers operate as the go-between person. As a matter of fact after completing a quote request or loan application, the auto loan broker will filter through various lenders and loan programs to locate the best financing package. In addition once car buyers have the quotes in hand, their job entails comparing all offers and picking the best lender.

Are you trapped in bad credit In addition does your bad credit always lock you out of an auto loan There is no denying that auto loans for bad credit can end all such worries as these loans are specially designed for the people with bad credit. In addition these include CCJs and IVAs, defaulters, arrears etc.

Point to be noted in this regard is that auto loan rates for bad credit are secured by the automobile itself so the borrowers dont have to worry about arranging collateral. As a matter of fact security through collateral gives you better interest rates. In other word you are free to select the automobile of your choice and finance it with auto loan with bad credit

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