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Tuesday, 01 April 2008 |
It does not matter if you have good credit, bad credit, or no credit; these tips apply to all and will help you qualify for a lower interest rate auto loan. These auto loan tips are to help you develop a new mindset and become a smarter buying consumer. Car dealers will reward you.
To improve your auto financing chances, we suggest the following to help you not only get an auto loan, but get the rate and terms that you want:
Auto Finance Interest Rate
The APR , also known as “annual percentage rate” is what you should look at to know what interest you are paying for your auto loan. This is the interest rate you pay per year on the owing balance of the auto finance. The interest rate you are given will depend on a few different factors:
Stability
# The longer you have worked at the same employer and lived at the same residence, the better you appear to the auto finance lenders. Living and working at the same place for a minimum of 6 months is a good rule to go by prior to applying for an auto loan as finance lenders will want to verify current income, job and residence before offering your auto finance and interest rate.
# Credit Score Your personal credit score is an important factor when determining your approval for auto finance and your interest rate. A rule of thumb is – The lower your credit score, the higher your interest rate will be.
# Credit Cards Owning too many credit cards could hurt you when applying for an auto loan. When a financial lender sees that you have multiple lines of credit and access to large sums of debt, they will be a little hesitant to give you a large sum of auto finance. A simple solution would be to close or cancel most credit cars that are no use to you and leave only 2 or 3 active.
Credit Card Balance
# The lower amount of debt you have, the better your interest rate will be. What this means is that by paying off your debt consistently you will be establishing your stability as stated above all while building a solid credit history that will ensure a low interest rate car loan.
Previous Loans
# Lenders look for individuals who have held past auto loans, personal loans, credit cards, mortgages or other financing. This proves stability as well in the eyes of the lender and will assist to giving you a low interest rate.
Auto Loan Penalties
Are there any penalties for paying the loan off early? Are there any other extra charges that could apply during the term of my finance? Are there any "hidden charges'' that could penalize me?
Vehicle Price
What is the exact price of the car you are buying? Be sure you are aware of the exact amount the vehicle is costing you.
Finance Total What is the exact total amount that you are financing? Be sure you are aware of the complete auto finance amount be borrowed.
Monthly Payment
What is the exact monthly payment? Be sure you know you can make the monthly payments without a problem. This will mean you may have to budget yourself accordingly.
Number of Payments
What is the total number of payments you have to make?
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