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Unsecured Auto Loans: How to Get the Best Rate
Unsecured auto loans are easy to find online, and getting a fast, no-hassle online quote will make it easier for you to find the best car loan rates. Before you start shopping for no collateral auto loans, you should take some time to learn about them, and this guide will help you do that, while providing tips on getting the best rates possible.
- You should get copies of your credit reports from all three credit reporting bureaus (Equifax, Experian and TransUnion), and you can get one free copy of each per year. Once you have your credit reports, look over them carefully and dispute any errors. It can take a month or more to get the erroneous items removed from your credit report, so you should do this months in advance of your loan application.
- One of the easiest ways to find a good rate on an unsecured auto loan is to comparison shop. That’s why online auto loan shopping is so convenient. You can make side-by-side comparisons on sites like insweb, and other sites have you fill out one simple form, then send you offers from multiple lenders.
- Think about visiting an auto loan broker. They work hard to attract business, and it’s their job to get you the lowest car rates they possibly can. They work with lenders to get you more agreeable interest rates, and in most cases, you can get a far better rate from a broker than you can by using the car dealership’s in-house finance company.
- Be ready to negotiate, and be ready to compromise. To get the lowest rate on no collateral auto loans, you need to find a good balance of a low interest rate and an agreeable loan term. Shorter-duration loans come with much lower interest rates, but a much higher monthly payment. Now is a good time to look at your budget, and see what kind of loan you can afford.
- Get pre-approved for a car loan. By being prequalified for an auto loan, you have much more bargaining power with the dealership and you can demand a better price. Those who are prequalified are treated as cash buyers, and they’re much more willing to work with you in terms of interest rates and monthly payments, as well as extra options, a higher value on your trade and bigger rebates.
- Consider buying a certified and preowned vehicle from your local dealership. These vehicles have gone through a thorough reconditioning and a strict inspection, and they drive (and look) like new. These are often lease returns or other lightly used vehicles, and cost thousands less than new. A cheaper vehicle comes with a better loan rate, so this route is worth looking into.
Unsecured auto loans allow you to afford the car you want, even if you can’t afford to pay a huge down payment. They may come with higher interest rates and monthly payments, but that’s a small price to pay for the convenience they offer. When entered into carefully, no collateral auto loans can work to your advantage.
