If you’re thinking of buying a car, odds are you’re also contemplating getting an auto loan. Finding the right auto loan will make your life easier when the time comes to buy a car. Read on for six crucial tips about car loans that will help you find a financing option for your needs. Are you ready to roll?
Know Your Score
Your credit is an essential factor when it comes to qualifying for low-interest rates. That’s why you should know what it is before you apply for a loan. It’s a good idea to request a free credit report from one of the three main bureaus every year. By doing so, you can check your credit report and credit score, and correct any mistakes that you find.
Aim for Shorter Terms
Choose a shorter loan term, as it offers better advantages. Not only will the interest rates be lower if the period is shorter, but you’ll save by paying less money monthly for your vehicle. And the best part is that you’ll be on the path to paying your debt off sooner. If you can’t afford a shorter term, consider waiting until you can make a larger down payment.
Pay It Down
Whatever your dream vehicle may be, the bigger your down payment, the lower your interest rate. The bare minimum you should try to put down is at least 20%. The rule of thumb is that for every $1,000 you put towards your down payment, your monthly payment will decrease by approximately $18.
Time It Right
Remember that timing is everything, especially when buying your dream ride. Wait till October, November, or December, as these are when sales associates try to meet their goals. You’re more likely to score a great deal if you get your timing right.
Cover Those Taxes & Fees
Taxes and fees are some of the things that are overlooked while buying a car. If you can, account for these expenses at the beginning of the process. Pay them off in cash. It may be a minor detail but could save you hundreds of dollars on your loan.
Refinance & Save
Did you know that refinancing your current car loan can save you money? This will improve your credit and lower your monthly payments. Refinancing is the quickest way to get on track if you want to be debt-free soon and pay less toward your car loan.
