Apply For A Car Loan

Before looking for a car loan the first thing you need to decide is how much you can afford to pay each month. Once the deal is signed and sealed it’s too late for regrets. You should sit down and figure out your monthly expenditures, allowing a predetermined amount for unexpected emergencies. Once this is done you should check around to see what’s being offered in your budget range.
Keep in mind there will be other expenses that come along with the purchase of a new car such as regular maintenance, things not covered by the guarantee like license plate renewal, oil change, tire replacement, and tune ups. Read the fine print, some dealerships require they do the required maintenance to keep the guarantee in effect. The last thing you want is a major problem only to find out it’s no longer covered.
Another important factor to keep in mind is the interest rate being offered, this can vary in range significantly and can effect how much your monthly payment will be and the final cost of your car. The monthly payment is also increased if a car is bought with zero down. If you can afford 10% or more as a down payment it will give you a lower monthly payment. The length of the contract can affect the final cost. The longer the contract the more you pay. In certain cases this can add up to hundred’s, even thousands of dollars.
The reverse is also true; you can save if you pay off the loan early. So what’s the best way to go? You could take out the loan for the longest period allowed, lowering the monthly payment and then pay extra each month. This way you have a payment you can well afford, pay extra when you can, and make the minimum payment if something unexpected comes up.
Besides banks there are plenty of other options to secure a new car loan. There are companies that are quite willing to give such loans at very competitive rates. Even more options are provided online. You just fill out the application and receive a quote with the amount of the loan, the interest rate being offered, and the monthly repayment plan. Some of the online companies will supply quotes from a number of different loan institutions allowing you to compare the value of each one.
Even if your credit isn’t so great, or considered bad, you can still apply for a loan. What you can expect under these conditions are higher interest rates. Someone with a good credit report may get a loan with 5% to 8% interest. With a bad credit report you can expect a 15% to 30% interest rate. Add to this a long-term loan, 5 or more years and you can expect paying double the amount or more of the cars original selling price.
So, what should you do before buying that new car? Compare interest rates. Get quotes, the more the better. Go online; find consumer reports about the cars you’re thinking of purchasing. Have there been any recalls or problems reported. The more informed you are the easier your choices become. It might seem like a pain in the butt, but doing your homework beforehand can save you a lot of money now and avoid headaches in the future.