Tips for Obtaining the Best Auto Loan Rates
One of the most important parts of shopping for a new (or used) car is getting the best rate on your loan. Although a few years ago it was fairly easy to get a low rate, lenders have tightened up their rules and the requirements to qualify can be quite strict. In order to obtain the best rate and conditions, you will need to put in a little work in advance. Below are a few tips to help you get the best auto loan rates.
Shop Around
The first and perhaps most important tip is to shop around to get the best rate possible. It used to be that the dealer would take care of everything and handed you a rate that you either accepted or took your business elsewhere. Today’s rate environment is more competitive and therefore it pays to shop around and do your own homework. Don’t limit yourself to your local banks – check out online lenders and credit unions too.
Improve Your Credit Score
The better your credit score, the easier it will be to qualify for a good auto loan rate. If you haven’t done so already, check your credit report to make sure everything is accurate. If there are any discrepancies, take the time to get them corrected. Paying off old bills and collections can also help. It also pays to apply for the loan from a reputable lender as they don’t always check your credit score when making decisions about loan approvals and rates.
Be Prepared
Being prepared is key when searching for the best auto loan rate. Have all of your information ready before you start the process, including your income, employment, and credit score. The more information the lender has, the better your chances of obtaining the best rate. Also, make sure you have a realistic budget in mind so you don’t over-extend yourself. Once the lender knows you can afford the loan, you will have a better chance of getting the auto loan you need at an affordable rate.
Smaller Down Payment
The larger your down payment, the lower your interest rate is likely to be. If you don’t have a large sum of money to put down, consider offering a trade-in vehicle or some other security for the loan. As long as it meets the lender’s criteria, they may be willing to give you a better rate.
Conclusion
Getting the best auto loan rate doesn’t have to be hard work, but it does require some preparation. Shopping around, improving your credit score, being prepared, and offering a larger down payment are all great strategies to obtaining the best auto loan rate. When you’re ready to start your search, check out Weather Checkers for the best auto loan rates.
