Do you need a new car? Has your old auto finally given up? Are you desperate for a new ride to get you to work on time and in comfort? Many people cannot afford to purchase an automobile outright. A car loan is the best chance of securing the motor you need. But it can be difficult to find a good deal, particularly with bad credit. Don’t despair – we tell you how to get a great auto loan rate. Here are the best auto loan rates in the market today.
Why Do Auto Loan Rates Matter?
Loan rates matter because they affect how much you can borrow for a car and how much you pay back. The best auto loan rates let you buy a car for a much lower amount since you have more favorable terms and better interest rates. Shop around for a good auto loan rate and get a better deal, even if you have bad credit.
How to Get the Best Auto Loan Rate
Before you start shopping for a loan, check your credit score. This helps show you how likely you are to be approved for a good loan rate. You can get your credit report for free. You may see some issues that you can correct to raise your credit score. Then you will be in a better position to shop around for good credit deals.
Next, do your research. You should look closely at loans from all kinds of places including a consumers credit union. Check carefully the key terms of different loans including the APR. Don’t just look at one lender. The auto loan market is competitive and there are a host of lenders looking for your business. But be careful when you apply for loans. These hard checks show up on your credit score and could make lenders nervous that you are about to take on debt. Don’t spend too long on your decision-making process.
Pre-Qualifying With Banks and Credit Unions
It is easier to secure a great loan rate when you pre-qualify for a bank loan or a loan from a credit union. It may be difficult to pre-qualify with a bank when you have bad credit. Credit unions generally offer more favorable terms for bad credit borrowers buying a car.
Things to Avoid
If you are struggling with bad credit, subprime lenders are appealing. It looks like you get a better deal and it seems to make getting an auto loan with bad credit easier. It is simpler at first, but subprime lenders normally charge high interest rates. You won’t be able to raise your credit score with a subprime loan. And if you fail to make payments, you could lose your car. Also, avoid low monthly payments when they are linked to longer loans. Take out the shortest loan period you can afford since this will result in a cheaper loan overall. And never take out a loan where you also have to buy add-ons like an extended warranty or car insurance. These drive up the cost of your finance.