Today in our modern world, cars are necessity rather than a luxury. It keeps us
more mobile especially that time is precious. Owning a car also keeps us on track
of our busy schedules. Having a car will eliminate the pressure of
hurrying catching up the next train or bus.
But a car is quite expensive and we
cannot afford to purchase it in cash. There is no need to worry
because you can have your dream car through an auto loan. Auto loan
provides you with an easy repayment scheme while enjoying the
privilege of having your own car.
But before you sign that auto loan
contract; there are important matters you should take into
consideration. Just like your car, the auto loan should suit your
lifestyle, financial capabilities as well as your credit standing.
Your chosen auto loan should be easy and comfortable for
Your first consideration should be
your budget. Identify up to how much money you are capable of
spending for your car loan payment and insurances every month. Do
you have money to pay for down payment or are you going to trade in
your old car? Are you going to buy a second hand or a brand new
If you have determined and you think
you are capable of paying the loan, it is now time to look for a
lender that can provide with the lowest interest rate.
Interest rates are one of the most
important considerations in dealing with an auto loan. The most
ideal choice is to go for a fixed interest rate especially when
interest rates are unstable. This will give you the guarantee that
you are going to pay a fixed interest even if current rates
But most of the auto loans are
offered with fixed percentage rate which are linked with the
securities called as T-bills or Treasury Bills. Shorter term rates
usually adjust the moment the Federal Reserve rises or lowers the
A piece of advice for car buyers, it
is sometimes better to apply for a loan before shopping for a car
because you can get lower interest rates. By doing so, you have
already locked a fixed interest rate and you don't have to worry for
any increase of rates even before closing your deal.
You may also opt to choose a variable
rate loan especially when interest rates are steadily going down.
This will help you save money because of low interest rate.
Normally, adjustable loans are offered at lower interest rate
compared to a 5 year car loan.
You can also consider refinancing especially if
you notice instability of interest rates. Though you will not save
much from refinancing, but would definitely help you out with your
Another option to lower your interest
rate is to improve your credit history. Pay out your debts at least
50% and control your spending. This way you can have an advantage of
negotiating for a lower interest rate. Remember that many lenders
provide lower interest rates with clients who have excellent credit
You have to have a new car. Each time
you drive your car, you are thinking of a new one. You notice all of
your vehicle's flaws - the dinged door, the rattle that you can't
find and the lack of a CD player.
You stretch and look each time to go
by the car lot. You may even know exactly what you want.
It can be enticing, especially the
new car smell.
But buying a new car goes much
further than simply picking out all the options. If you want to get
the most vehicle for your money, you will do a little homework.
There are some essential steps that will help you avoid being
fleeced. You know the stereotype of the car salesman. If you are
well informed, she or he won't be any problem.
Think of this as an exploration. You
map out a game plan that gives you the upper hand. Knowing what you
want gives you a huge advantage in the buying process.
This guide will help you in
selecting, financing, purchasing and insuring your new vehicle. It
may seem like a little work, but it may be the difference between
getting the car you want and settling for a different one. You will
find that the process is easy, and in the end it saves you money,
time and aggravation.
Bad credit or no credit does not have
to keep you from getting an auto loan anymore. Many companies
specialize in helping people with bad credit get the car they have
their hearts set on. There are still some general guidelines that
many lenders follow, but keep in mind that each company is different
so look around for the auto loan that will suit your needs
Here is some of the basic criterion
that you must meet to be granted an auto loan:
Proof of income is required. In most
cases the minimum required monthly income is $1,500 per month or
$8.66 per hour with full time employment.
Applicants with no bureau score or
rating must have been working at least 1 year for their current
employer. Auto lenders look more favorably on applicants that have
been working for their current employer for 2 years.
If you have a repossessions with a
deficiency balance that is less than one year old and not included
in bankruptcy, a cash down payment may be required for you to
Direct lenders that offer car loans
have much more stringent underwriting criteria than the indirect car
loan lenders available to some licensed auto dealers. If you've have
bad credit and have been rejected for an auto loan in the past,
chances are you were dealing with a direct lender.
Auto loans are just like any other
form of credit. It is never free of charge. Remember that how much
creditors will charge you for their services differ, so be sure to
check out the competition. And always find out their rates before
you agree to borrow from them. It is imperative that you review the
terms of your auto loan before you enter into an agreement with the
You will also want to take into
account the amount of time you will be making payments. For example,
you may get lower monthly payment rates over 3 years than over 2.
However, the total finance charges over time are higher over a
There is nothing wrong with using an
auto loan to purchase a car, just make sure that you are informed
about your choices of lender. The right choice will make all the
difference when buying your car or