With public transportation it is becoming a lot more demanding to travel. It is not surprising that lots of people consider acquiring their own vehicles. What this does is allow them to travel where ever they want to go. The primary problem can be the cost of buying a car. That is where a car loan becomes a sensible tool for you to use. An Auto Loan Calculator will help you figure out what payments you will have to make.
When you consider a regular car loan it is usually going to be a person or organization taking on the loan. The arrangement is that a client will apply for a mortgage and present the essential documents to a lending firm. The lending firm could be a car dealership a traditional bank or another monetary establishment. When the loan qualifies the consumer will pay a down payment for the vehicle and settles the remainder of the amount in monthly installments.
Use our Auto Loan Calculator to calculate payments
Car loans depend on factors such as a person’s credit history regular earnings and vehicle type preferred. At times loans may also rely on the financing institution lending the finances. For example some car dealerships may offer loan rates that are lower than the banks. When this happens it could be that the loan provider is trying to increase their market share or beat out the competition that month. Either way when that happens you as the customer win with a better car loan.
The role that car loans play is that they allow people to purchase a car who would otherwise not be able to afford it. It also allows companies to spend their capital on internal improvement instead of trying to cover the expenses for their auto fleet. Both of these instances are not a beneficial way for people to thrive in the strongest economy on earth. Use an Auto Loan Calculator to calculate payments.
Consumers should always make it a point to remember the vast array of car loans that exist and must be studied before a final decision is made. Such as those programs designed for people who may be between jobs or have a lousy credit history there are financing schemes made for them. What this translates to is that even though a person may be on the bottom rung of the financial ladder they can still obtain a means to buy a car. Check this Car Payment Calculator for more detailed payment information.
Everything about Car Loans
Where and How to get Auto Financing
You can apply for a car loan from a variety of sources: banks, credit unions, online direct lenders, loan brokers, and auto finance companies. Auto Manufacturer also offer dealer financing on selected car models. Often auto dealers advertise special loan rates, some as low as 0%, however, only people with perfect credit can qualify for zero percent financing.
Choosing the Right Auto Loan
The time you can take to pay back a car loan also varies. Usually you can choose from 36 months (three years), 48 months (four years) or 60 months (five years). You can lower your monthly payments by taking a longer loan period. However, the longer the loan period the higher the total interest you will pay over the life of the loan.
Auto Loan Interest Rates
Interest rates for loans for people with average credit can be up to 60% higher than the rates available to people with excellent credit. People with poor credit may have to pay an interest rate two to four times higher. If you are seeking financing for a new or used car, you have many options for financing even if you have a poor financial history. However, late payments and other credit problems signal lenders that you are a risky customer, which will increase the interest rates on loans available to you. There are differences between lenders, so find the best deal by shopping around.
New Car Loans
Shopping for the Best Auto Financing
It is always best to shop around to find the best auto financing deals. Always compare car dealer financing rates with bank rates, credit unions, and other loan institutions first, as interest rates vary it’s quite significantly. On certain select car models there may be special manufacture incentives, such as low interest rates, however these deals normally require a larger down payment and a larger down payment.
Get a Car Loan Quote to find the Best Rates
When planning your budget, try to keep the length of the loan as short as possible. A three-year loan with the same rate of interest costs you less overall than a four or five year loan. While you need to keep the payments within your budget each month, you also need to look at your total cost. Once you have decided which vehicle you wish to purchase, consider getting pre-approval for an auto loan. We recommend getting as many car loan quotes as you can to compare interest rates. Doing this online saves a great deal of time and it is totally free. Some lending companies will issue you a check once your loan is approved allowing you to use the check just like cash when car shopping.
New Car Buying Advice
Negotiating a New Car Price
There are several steps involved when negotiating at the car dealership, getting the best price on a new car, trading-in you used vehicle, and financing. It is very important to keep all of these issues separate. Deal with each issue independently so not to confuse the final price of the new car you plan on purchasing.
New Car Price Quote
Remember to take along your new car price quote. Although this represents the car dealers lowest possible price on a new car and should include any dealer rebates and incentives offered, there is always room to negotiate a better deal. Auto manufactures often want to get rid of slow selling cars or reduce inventory, therefore they offer cash rebates or low financing deals. Even with a great new car price quote, negotiate on the price.
Buying a New Car below Invoice Price
If the car dealer sells you a car at the invoice price, he will still make money from the deal as the manufacturer refunds a certain percentage of the car’s price to the dealer. This is known as car dealer hold back. The car dealer holdback is a specific percentage of the car’s price that is credited to the dealer’s account periodically by the manufacturer and reduces his cost by as much as 2-3%. This can start to add up significantly, 3% on a $20,000 car is $600. The dealer could sell you the car at his invoice price and still make $600 profit. Ultimately, if you end up buying a new car for $100-$300 over dealer invoice price you have a great deal and the car dealer has made a fair profit.
Buying a Used Car
If you plan on buying a used vehicle from a private seller, use this check list as a guide. Normally when buying privately, there are no guarantees, so it is advisable to have vehicle inspected by a qualified mechanic. However, you can save a lot of time by asking the right questions on the phone before going to look at the vehicle. Questions you should ask, include:
Why you are selling the vehicle?
● Is there anything mechanically that it needs right now? If the seller begins by telling you that the car is great but needs a tune-up, the AC needs topping-up, or that the front brakes aren’t so good, skip it. Chances are good that the car needs much more than that, and that’s why the work hasn’t been done.
● Has the car had any body or paint work? If it’s a two-year-old car that has already been repainted, don’t pursue it further.
● Have you owned the car long? Many people these days, more than you think, have unofficially gone into the used-car business. They may fix up as many as 20 cars a year and sell them out of their houses. As many as one-third of the cars you call will often be sold by private dealers.
● Do you have copies of the work you have done on the vehicle? If yes, ask what work was done. If no, forget it, unless the car has been regularly serviced at a facility that will have records on file that you would be willing to obtain and review.
● What is the condition of the tires and brakes? Bad tires and bad brakes make for a car that has not received regular maintenance. You want to find the type of owner who tells you the vehicle has good tires and who knows the condition of the front and rear brakes.
● How flexible are you on your price? Buy a good car at a fair price, not a piece of junk at a bargain. Someone who comes down too far too quick may have a bad car on his/her hands.
● Has the car been used on a regular basis? Unless you are buying a recreational vehicle or a weekend sports car, buy a car that has gotten routine use.
Private sellers sometimes over-estimate the condition of their cars on the phone, so don’t be too surprised to find a car that looks quite different from what you had expected. There are many internet web sites that list used cars for sale, from both auto dealers and private sellers. Using an online auto classifieds or used car listing service to find a used car is a very convenient way to shop.
Auto Loan Refinance
There are many possible reasons why you are currently paying too much on your current car loan. When you originally purchased your car perhaps you did not shop around for the best financing deals, or you took out your auto financing through a car dealer at a higher interest rate. If your credit was not in as good shape as it is now you would have been penalized with a higher interest rate.
Although banks do make long term loans, the bulk of their lending is on short term basis. While extending business loans, bank measures strength and stability of the firms by comparing their finance values with their market value which really matters. Beside corporate loans, banks are also offering personal loans especially student loans to cover specific market segment of students. On the other hand banks are also diversified their line of operation by offering car finance facility to their existing and potential customers.
Are your car payments too high? Refinance now and save. Even with less than perfect credit, you can qualify to refinance an auto loan within minutes!
Car Loans and Auto Finance
Applying for an auto loan online is quick, simple, and hassle free. The online application is completed in under 2 minutes and you can get approved within several hours. Applying for an auto loan online is FREE, there are no hidden costs, and no commitment or obligation. Once you have decided on a vehicle to purchase, consider getting pre-approval for financing. Some lending companies will issue you a check once your loan is approved allowing you to use the check just like cash when car shopping.
Auto Loan Refinance
Are you paying too much on your auto loan? With interest rates at an all time low, you could save hundreds, even thousands of dollars by refinancing your current auto loan. For example, if you originally financed a new car for $20,000 at an interest rate of 12.5% for 60 months and have 36 months remaining on the loan, your current monthly payment would be $449.96. In 60 months you would have paid out $6,997.53 in interest! However, if you refinanced at 9% for the remaining 36 months, your monthly payment would drop down to $318.00 per month and you would save over $2,000 in interest.
Car Loan Quote
A car loan quote allows you to compare interest rates from multiple lenders. As with any kind of loan, it makes sense to shop around to find the best deals. Always compare car dealer financing, with bank rates, credit unions, and other lending institutions as interest rates can vary quite significantly.
Knowing your Credit
As your credit history is one of the main factors in determining the interest rate of your car loan, it makes sense to insure your credit report is up to date and correct. Errors on credit reports can commonly occur and have a negative effect on a pending loan application. Always check your credit report ahead of time and you will be able to contest any inaccurate information. Correcting errors in your credit report will assist you in qualifying for a better loan with a lower interest rate.
Auto Loan Glossary
Our auto loan glossary will help you better understand some of the terms and there definitions used in auto loan financing.
The accumulation of interest charges.
The refusal to grant credit to a person applying for credit.
Adverse Action Notice
A document that explains why credit has been denied.
The repayment of a loan by regular installments that covers the principal and interest.
A table showing the amount of a principal and interest due at regular payment intervals.
The amount of time required to amortize the loan. For example, for a 3-year fixed-rate loan, the amortization term is 36 months.
The amount of credit provided by a lender.
Annual Percentage Rate (APR)
The Annual Percentage Rate (APR) is a yearly rate of interest that includes all of the fees and expenses paid to acquire a loan.
An initial written statement of personal and financial information required for an evaluation of creditworthiness.
Anything of monetary value that is owned by a person.
When a person is relieved from the payment of all debts after the surrender of all assets to a court-appointed trustee.
A proceeding in a federal court in which a debtor can relieve the debts by transferring his or her assets to a trustee.
An interest rate or yield expressed as 1/100 of one percent.
An individual that obtains credit from a lender.
A person who assists in negotiating contracts and who works on a commission or a fee.
An individual who purchases an auto jointly with a Buyer. This individual is jointly liable for repayment of the loan.
A second owner of a vehicle.
An individual who agrees to pay the amount due if the buyer fails to meet contractual obligations.
Assets that guarantees the repayment of a loan.
The efforts used to bring a delinquent account current..
Credit Reporting Agency
An organization that prepares reports used by lenders to determine a potential borrower’s credit history.
A person or institution who extends credit and to whom the obligation is payable.
An organization that gathers consumer credit information. The are three major credit bureaus: Equifax, Experian, and TransUnion.
A record of an individual’s credit payment and debt history. A credit history helps a lender to determine the credit worthiness of an individual who has applied for credit.
A report of an individual’s credit history prepared by a credit bureau and used by a lender in determining a loan applicant’s credit worthiness.
A assessment used to evaluate the amount of “risk” involved in a credit transaction.
Determination of a consumer’s eligibility to borrow money.
An amount owed to another person or organization.
Failure to comply with the terms of a loan contract.
The failure to make a loan payment on time.
A loan is originated directly between a lender and a consumer..
The date in a given month that a loan payment is due.
Effective Gross Income
Normal annual income including overtime that is regular or guaranteed.
Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports and information.
Interest charges applied to a loan.
Fixed Rate Loan
A loan in which the interest rate remains constant throughout the life of a loan.
A person who agrees to pay the debt of another.
The cost of borrowing money.
The interest rate is a part of the annual percentage rate (APR) equation.
A charge assessed by a lender for payments received after a specific due date.
Money lent to a consumer to be repaid over a period of time.
The amount owed on a loan after deducting the amount of payments made.
The length of the loan, usually broken down into months (24, 36, 48, and 60 months, etc).
A ratio used to determine the amount of money a lender will loan based on the value of a car
The amount of principal and interest the borrower is obligated to pay back each month.
A lending organization that loans money to individuals with a poor credit history.
The financed amount that interest will be paid on.
The unpaid balance of a loan.
The annual rate of interest on a loan expressed as a percentage of 100.
A loan that is secured by collateral.
Assets or personal property pledged as collateral to secure a loan.
An interest in property that secures performance of a credit obligation.