If you are looking to buy a car, chances are you will need a car loan. Unless your going to pay in cash then securing a car loan beforehand is something you’ll want to do. There are a few different places you can go for these loans like Canada Drives.
You can go to a bank, a private financing company, or the car dealers themselves. It is recommended to secure your loan before going to a car dealership to look for cars. A car loan can be utilized to purchase both new and used vehicles.
How is My Loan Determined?
When you apply for a car loan your credit profile will be judged. This will determine what kind of interest rate you get. Even if you have a bad credit score you can still find a car loan that is specifically designed for people like you. Secondarily the more money you put down as a down payment the lower your monthly bill will be.
If you use collateral then you can secure more money. You can use your home to do this or a previously owned car. You should also opt for the shortest term car loan you can possibly do, and also get the lowest pay rate you are able to secure. If you can’t get a short term loan perhaps looking into car refinancing is a good idea.
You should research several different loan offices. You can do this online. You should also keep in mind that you’ll typically get a better rate on your loan through a private lender as opposed to the banks or car dealers. Getting several different quotes is a great idea also.
When you get pre-approved for a car loan dealers tend to offer you better prices. This is because they already know you have the funds. You can even apply online for a car loan and will have an answer very fast without leaving your home. When searching these sites you can compare different loans easily. The beauty off these is that you can specify your needs. Such as with repayment periods, and loan amount.
Keep in Mind
Some other things to keep in mind are things like the total cost of the loan. If you have a $20,000 loan and you have a 5 percent interest rate as opposed to a 7 percent rate then you’ll save almost a $1,000 over the course of a three-year loan. Of course, if you attain a five-year loan the savings on interest will be increased.
Another thing to keep in mind is the longer your car loan is the longer it takes to build equity with your vehicle. What this means is it takes longer for your car to be worth more money than you owe on it.