Used Car Loan, Many young people could not afford their first car if it weren’t for
the availability of used car financing. They just don’t have the cash to buy
the car outright. Fortunately, obtaining such financing at very reasonable
interest rates is not difficult. You just need to do your research and follow
these simple steps. Used Car Loan
As you’re paging through the used car ads you’re bound to come across
what looks like absolutely fantastic car loan availability from the car
dealers themselves. You’ll see zero percent offers, low payment offers that
seem too good to be true. Of course, they are! These ads are meant to
mislead you, make you come in and apply, and end up getting a loan at 10 to
18 percent over the standard rates! Yes, interest-free offers are available,
but only if you have perfect credit. Most used car buyers do not fall into this category. In general, used car loan interest rates exceed those of new cars
by several percentage points on average. Used Car Loan[ad_1]
One way to mitigate this cost is to get your loan through a dedicated finance
company rather than through the car dealership or your normal bank.
These institutions generally have more liberal lending policies. Any lender,
however, will require proof of the value of the car, and a 20 percent down
payment. This is normal and should not be regarded as a suspicious
request. Both these regulations are designed to give the lender a safety
margin, should the loan go into default. If that happens, the lender’s only
recourse is in the collateral, which is the car. Therefore, they naturally have
a vested interest in knowing that you did not pay too much for the car, and
that at least 20 percent of its value holds even if the default happens
immediately. This is actually an advantage to you, as well. There is someone
looking over your shoulder at the transaction, making sure it is a respectable deal and price for the vehicle in its current state and condition.
Before you apply for your financing, run a credit check on yourself. This will help you determine what you should be able to afford and should be offered. Sometimes you may realize before you really get started that a used car loan is not affordable for you.
This could be because of a low credit score, inability to meet the down payment requirements, or insurance concerns. Knowing this going in is important, because online institutions will tempt you with one-day offers. Don’t fall for it! Despite their dire warnings of offer expiration, these lenders will be there tomorrow with another fantastic offer for you! Wait until you are comfortable with the amount and the terms. It is not worth the devastation a loan default can play on your credit history to take it now when you’re unsure you can repay it as required.
Another caution with car loans and any other financial transactions – keep all your paperwork in good order. If you’ve got the loan online, print out a copy of everything and store it in a safe place. Never sign anything you don’t understand completely. Ask questions until you understand. Talk to a third-party professional to get a different point of view. It’s your responsibility to protect your own interests. Don’t expect the lender to do it for you. This is the kind of thinking that led to the current mortgage crisis in the United States. Used Car Loan
One final piece of advice: As soon as you get your used car loan, look into refinancing it, especially if you weren’t able to get a zero to three percent interest rate. Refinancing sites will usually have calculators on them so you can calculate your total savings. If you can get a percentage point under your current contract, it’s worth it.