Interest rates on auto loans
A car is not a luxury any more. It is a necessity. It is not easy, though, to buy a car cash down. A loan includes the interest on the amount that you borrow, and this leads to the subject of a monthly instalment plan for paying back the loan. There are many financial institutions that offer auto loans. What you will have to study are the interest rates on auto loans, so that you can compare these rates and make an informed decision about the kind of loan that you want to take and from which financial institution.
What does interest rate depend on?
It is important to note that interest rates vary. Some factors which influence interest rates on auto loans are:
Individual credit analysis
Having a co-signatory
The principal amount
Time period for repayment of loan
Age of the car
Financial institutions too offer competitive interest rates on auto loans so as to attract business.
Useful things to know about loans:
Long term loans: These are usually for new cars. The time periods to choose from are 36 months, 48 months and 60 months, and the interest rates on auto loans vary accordingly. Here, though the monthly instalment is low, eventually you end up paying more.
Short term loans: These loans have a shorter time period, but a higher monthly instalment plan. Therefore, at the end of the time period you actually pay less. In fact some financiers even offer a lower interest rate.
Credit Unions: These institutions offer a very good deal, lower rates of interest for larger loans. Also, they offer excellent customer care service.
Auto dealers: It is easy to get car loans through auto dealers, and the whole process takes a shorter time time than with other institutions. The catch, though, is that the interest rates on auto loans are higher.
Home equity car loans: This involves putting up your home as collateral. The interest rates on auto loans are higher but there are tax benefits.
How to indulge in comparison shopping for lower interest rates on auto loans:
The best way to shop for competitive interest rates on auto loans is online. First of all you will need to get all the information you possibly can on the cars that you have short-listed. Then, check out all the financial institutions in your area, including 5 banks. Make a database of what interest rates are offered by all these organizations.
When you work online, it is easy to research all the financial institutions that you have made a note of, to see how sound they are as well as what deals they are offering. Some of the trusted financing institutions are bankrate.com, eloan.com and carmoneyfast.com among others. These, institutions provide easy car financing and get the best deals on interest rates on auto loans. Once you have all the data, you will be able to make an informed decision on which institution to go to for the best interest rates on auto loans.