Car Loans

How to Get the Car Loan You Can Afford

It is normal to need a car loan when buying a car. Paying the car loan is essential to avoid paying late fees or possibly losing your car. The biggest mistake made by most consumers is to shop for cars before talking to the bank. Only by talking with the bank will you get a good understanding of what you will be able to receive in terms of a vehicle loan.

The most important piece of information to pay attention to in a loan like this is the auto loan rate. The rate you get will depend on the length of the loan. In addition to the length of the loan, your credit and the status of the car (new or used) will factor into the rates you will receive. Those getting a 36 month lease on a used car can get a 4.39% interest rate if they qualify for prime rates. A 60 month rate on a new car will be 4.52% for prime rates.

Talk with lenders to see what rates you can qualify for. You can put this amount, the length you want to pay the loan and the amount you can afford to pay each month into a car loan calculator to find out what amount you can borrow.

You can use the amount that you get from the calculator to decide which cars you will purchase. Making sure that you are paying the loan will help to avoid repossession or additional fees. The fees you pay will depend on the car loan financing you receive. Those who receive loans from the dealership may face steeper fines than those levied by a bank.

To attain a bank auto loan, contact your bank or a competing bank prior to purchasing the car. Having a pre-approval for financing allows you to have a bargaining chip when shopping for your new car. Often, if you are preapproved for a loan, you will be able to work out a better deal on an interest rate through the bank that the car dealership uses.