Car loans are great financial tools which allow you to buy a car, finance the purchase with the loan and then either pay the car off over the next several years or simply pay the car back over time. When you take out a car finance loan from a bank, you get your money in a fixed amount, usually on a credit card, and then pay it all back (with interest) over a certain period of time. The amount that you can borrow will depend on several factors including your credit rating, how much you pay back each month and your income.
The type of car loans that you can get will also depend on your credit score and the amount that is requested. The lower your credit score, the higher the amount that you can borrow will be. A car finance loan will therefore usually be higher than one which does not require a credit check on its applicant. As such, those who have a good credit score should get a good deal on a car loan. Those with less than ideal scores, however, will have to go in for a loan which has stricter terms.
There are two main types of car finance loans: in-house and online. For in-house applications, the usual process is that you visit an office where an agent will talk you through everything. The agent will inform you about the interest rate, monthly payments, total loan amount and other important details. They will also ask for your social insurance number in case they need it for any reason. This is standard practice when it comes to dealing with car loans.
When applying for car loans online, your application goes live immediately to a variety of lenders and banks who may then decide whether or not to proceed with your request. It is very quick and easy. You are just given a loan amount, which you have to pay back monthly in exact amount. However, there is a cost associated with this option as well. You will have to pay commission fees to the finance company every month as well as a small processing fee.
The best place to get car loans at the lowest possible rates and cheapest loan terms is through the Internet. By going online, the application process becomes simple and hassle-free. Most of the time, this is because you do not have to deal directly with any lender; thus, keeping the transaction cost to a minimum. Going through a dealership will give you access to more lenders and thus ensuring that you get better interest rates and loan terms. However, you will have to shell out more on car loans as a dealer’s fee will be added in.
It is always a good idea to get car loans from a bank, rather than from individual lenders or even from car dealerships. This is because a bank will offer better interest rates on a car payment as opposed to an individual lender or dealership. Also, a bank will gladly approve a loan application within 24 hours of your car payment due date. If you are getting car loans from individual lenders or car dealerships, chances are you might not get the best loan terms or interest rates available. A bank will be able to quickly approve a car payment with competitive loan application terms.
Before you select any type of car finance provider, make sure you read through the terms and conditions thoroughly. Make sure the interest rate and the monthly payments do not have any hidden charges. Look for a lender that offers the lowest monthly repayments that are fixed and not variable. In addition, look for an interest rate that is competitive and also has the lowest processing fee among all the other lenders.
When you apply for car loans online, it will take about 2 weeks to get your approval notice. If you want to go for used car finance, it will take a little longer. However, if you have less cash to hand over, a new car loan will be more feasible for you. If you own a new car yourself, it will take about a month and a half to get your dealer’s loan application approved. So if you need a car today, go ahead and get a car loans from online loan providers. You can choose from repossessed vehicles, new cars, used cars, or even from repo cars.