Finding Banks with Low Auto Loan Rates
If you are looking for the lowest auto loan rates, you need to know how to find lenders offering the most affordable car loans. In order to get the lowest rates possible, you will need to have good or excellent credit to minimize any risk you may pose to car loan lenders. This how-to guide will show you how to find loans with the lowest interest rates.
Research Lender Rates
When searching for a loan it is always a good idea to shop around. Banks, credit unions and online loan operations are the most common and popular places to secure financing for a vehicle. Additionally, almost every single car dealer will be happy to provide financing for your new car. While a bit overwhelming, it really pays to do some researching; the web is a quick way to peruse current car loan interest rates in your area. Check all available outlets and compare rates, terms and fees.
Also, look for discount rates by organizations like the Automobile Club or AARP. If you belong to a trade group or organization that has negotiated better terms for their member be sure to take advantage of those discounts.
Look for Credit Unions
Credit unions are a great source for low-rate auto finance loans. If you are not currently a credit union member, visit local credit unions and inquire about membership requirements. You may qualify for membership in a credit union based on region, by a family member who is already a one or is eligible to be one.
Research Captive Finance Companies
If you are shopping for a new car or certified used car, you might be able to take advantage of special finance deals being offered by captive finance companies. Captive finance companies are simply the lending arm of the major car manufacturing companies. Most large car manufacturers have a subsidiary that makes car loans to consumers. For car buyers with good or excellent credit, these companies often run incredibly low interest loan deals—sometimes as low as zero percent. Bear in mind that these low interest loans are usually only made for loans with particularly short terms of two years or less.
Your credit score affects the interest rate and terms on your loan, so be sure to review your credit reports annually. Report any inaccuracies to the reporting agency as soon as you notice them.
If your credit score is below 620, you likely only qualify for subprime loans. Keeping your credit report clean is extremely important when looking for a car loan. Make sure all your payments are on-time and limit your credit usage if your score is low.
Loans, like the price of the vehicle are negotiable. If you have good credit and a sizable down payment you should be able to negotiate favorable rates and terms for your loan. If you are not happy with the deal you are being offered shop around and see if you can find a better deal.
Make sure you read and understand all loan documents before you sign them. Interest rates are just one part of the loan. Fees, terms and conditions, and origination fees are a large part of a loan as well.