Cheap Car Loans

How to Find Cheap Car Loans

When you are looking for the best deal on your new set of wheels, it’s important to remember a few simple tips:

• Don’t be swayed by an aggressive salesperson. Remember, the people who work at the car dealership make their living by selling cars. Their job is to make money for the company, not help you find the best deal on your car loan.
• Make as large of a down payment as possible. Even if it takes you a few extra months to save the money, a large down payment is a wise choice. When you borrow less money, you pay less in interest on your loan.
• Instead of trading in your old car, consider selling it to a private individual. In many cases, you can get a better deal by selling your car on your own. It’s more work, but the money you’ll save by being able to increase your down payment is well worth the extra effort.

Financing Your Car Loan Online

In many cases, applying for a car loan online is a smart financial move. However, if you’re used to simply obtaining financing at the car dealership, this process can seem a bit overwhelming.

The first step in applying for a car loan online is to find out the sticker price of the car you want to buy. If you’re not exactly sure what car you want just yet, use the price of the most expensive option you’re considering.

Once you’re approved for the amount of your requested loan, the lender will send you a blank check to use at the dealership. If you write the check for less than the approved amount, your loan is simply reduced. Since it’s inconvenient to go back and ask for more money at this point, it’s best to slightly overestimate the amount of money needed on your initial loan application.

If you’re interested in applying for a car loan online, check out the following websites:

• E-LOAN
• Capital One Auto Finance
• HSBC Auto Finance
• Wells Fargo Auto Loans

Refinancing an Existing Loan

If you are still trying to pay off a current car loan, refinancing may be a good way to save money. If your credit score has improved since you initially obtained the loan, refinancing can lower your interest rate. In addition, since auto refinancing is based on how much money you need to pay off your current loan and not the actual value of the car, no appraisal is necessary for cheap car loans.

Many lenders have a policy that prohibits refinancing their own car loans, so you’ll need to do some research to find a new lender that offers more favorable terms. However, most lenders that offer car loans for an initial purchase also provide some form of auto refinancing.

The Importance of a Good Credit Score

Whether you’re interested in cheap car loans or buying a new home, having a good credit score is key. Your credit score is a number between 300 and 850, with most scores falling between 600 and 700. Your credit score is calculated based on your:

• Payment history
• Amount owed
• Length of credit history
• Types of credit used
• Amount of new credit

The calculation does not include variables such as your income, child support obligations, and whether or not you are currently participating in any sort of credit counseling program.

If you know you have a poor credit history and your car purchase isn’t a true emergency, it’s best to spend some time improving your credit score before attempting to get a car loan. To improve your credit score, remember the following tips:

• Pay your bills on time.
• Use cash whenever possible; don’t borrow more money than what is necessary.
• Keep credit card balances at or below 25 percent of your total credit limit.
• Don’t close unused credit accounts, since part of your credit score is determined by the amount of available credit you have at your disposal.
• Order a copy of your credit report on a regular basis to check for mistakes that could be hurting your credit score.

You can learn more about managing your credit by reviewing the helpful articles at LoveToKnow Credit Cards.