Need an Auto Loan? How to Borrow Wisely

There are always risks involved in borrowing money, especially when it comes to taking out car loans. Still, if you keep some important tips in mind, then borrowing does not have to be a scary and daunting experience.

Know What You Can Afford

It is crucial to know how much you are able and willing to spend on a vehicle before shopping for one, and certainly before applying for financial assistance. How much cash can you afford to front for a down payment? This will affect the principal amount you have to borrow. How much can you afford to pay back each month? This information will help you decide which loan options are best for you.

Do Your Homework

Before deciding on a loan, it’s important to be fully aware of all terms of the agreement. You should know the details like interest rates, the length of the loan, and the need for any collateral. Taking out a loan means a promise to pay it back, so you shouldn’t agree to the financial responsibilities involved unless you believe you’ll be able to follow through on your end of the bargain.

Examine the Loan as a Whole, Not Just Monthly Payments

There is much more to a loan than just a monthly fee, so it’s imperative to look at the larger picture. When taking out a loan, you should be aware of not just what you’ll owe every month, but also the total purchase cost of the loan, and the full payoff amount including interest. This information should help give you an idea whether that particular loan fits your needs and abilities as a borrower.

Understand Your Credit

When applying for a loan, it’s imperative to know your credit score and history, and how it might affect your loan. You might also want to research the minimum credit score required to qualify for certain auto loans you may be eligible to receive.

Ready for that new car? The above suggestions should be helpful as you go about soliciting the car loans you need.

How to Purchase a Car Loan

Purchasing a new or even a used car is an exciting experience. However, trying to get a car loan to help pay for the car can be challenging. You may simply be wondering where to start. Here are several steps that will show you how to go about buying an auto loan.

 

Keep Your Credit Score in Mind

 

Before you even begin to look for car loans, you should find out your credit score if you don’t already know it off the top of your head. This can help the overall process go smoothly. Your credit score is typically the greatest factor in determining what type of rate you are eligible for. It is important to know that a higher score often leads to a lower rate.

 

Compare the Different Options

 

The next step is to compare the lender options you have. They type of loans and rates can vary by dealership, which is why it is vital that you shop around. After you find a dealership that offers the car loan you are looking for, be prepared to provide some detailed personal information.

 

Consider Pre-Approval

 

One reason to consider pre-approval for a loan is that it can give you more power when it comes to negotiating a vehicle’s price. Pre-approval may also help you avoid any last minute surprises from a car dealer.

 

Seal the Deal

 

After you have decided on the type of vehicle you are going to purchase, you will have the chance to do some final negotiations. This is usually where you can try and lower the car price or get a better deal.

 

As you can see, navigating the process of securing a car loan doesn’t have to be a complicated ordeal. By following these simple steps, you will be well on your way to securing a car loan that can help finance your dream car.

Basics of Bad Credit Loans for Car Purchases

Buying a car can be an intimidating process. The majority of buyers will obtain a loan for this large and important purchase. Many believe that bad credit from defaults, collections, foreclosures, bankruptcies, judgements and other reasons will disqualify them from all loans. Having poor credit, while not ideal, does not have to keep you from the new car you need. Having some basic knowledge of bad credit car loans will help you locate the best financing option for your auto purchase.

 

When obtaining any loan, it is important to be realistic about what you can afford. When you have bad credit, the interest rate on any loan offered is going to be higher than if you had good credit. Higher interest rates mean higher payments. Determine a payment amount you are comfortable with and stick to it, even if it means buying less of a car than you want right now. Your bad credit loan can help rebuild your credit score provided you make payments on time. Don’t take on a payment that puts an uncomfortable strain on your budget.

 

There are many lenders who specialize in bad credit loans. Since loan terms will vary from lender to lender, it is helpful to do some advance research. Consider getting preapproved for a loan. A preapproval for a set loan amount will keep you from looking at more car than you can afford. It can also be a good tool in negotiating the car’s sale price.

 

While you may have loan offers from multiple lenders with different terms, try to keep the loan duration as short as possible. It is in your best financial interest to pay off this type of high interest loan as fast as possible.

 

Don’t let bad credit discourage you when vehicle shopping. A little advance planning will help you make the best of your car buying experience. Bad credit car loans are available to help with this important purchase

Car Loans Explained

Most folks aren’t able to buy a car in cash and so they need to take out a loan. When it comes to explaining car loans, it’s important to understand what things can influence customers’ monthly payments. This is because how much someone pays is determined by three main factors: the down payment, the interest rate and the loan term.

 

What do those terms mean? The down payment is the amount a customer pays toward the total cost of a car. The more money someone can put down, the less money they will have to borrow. However, customers don’t always need to have a down payment to walk away with a pair of keys in their hands at the end of the day. A zero down payment means that the principal of the loan covers the full cost of the vehicle.

 

The interest rate is how much someone pays to borrow the money. Making payments on car loans each month means the customer is paying back the interest on the loan along with the overall balance of the loan. The loan term is how long a borrower has to pay back the money. Loan terms can range from as short as one year to six years or more.

 

The interest rate offered to a customer depends on a several factors. One factor is the customer’s credit score. This number is based on things like paying bills on time and using available credit without maxing it out. Another factor is the length of the loan term. The shorter amount of time borrowers select to pay back the loan, the lower interest rate they are typically offered at our dealership.

 

Car loans help customers take cars home. We work to make the buying process effortless, including offering on-site financing. By working with several lenders, we can provide competitive loan rates. This makes buying a car a simple one-stop shopping experience.

Save Money When Obtaining Car Loans

When you have a poor credit history, you can expect to pay a higher interest rate when you purchase a new or used car. However, knowing that you’ll be paying higher interest doesn’t mean that you have to settle for the worst payment/interest combination. Consider the following tactics for saving money when you obtain bad credit car loans.

 

Get the Shortest-Term Loan You Can

 

Shorter loans typically have lower interest rates than longer-term loans. However, you do need to be realistic about the monthly payments you can afford and don’t forget to factor in auto insurance, gasoline, and maintenance. If you must have a long-term loan now, ask about prepayment penalties. You may be able to shorten the length of the loan if circumstances improve over time.

 

Skip the Expensive Features

 

You don’t need a sunroof and you can probably get by without paint protection. All of the little add-ons offered by the salesmen will quickly add up and, when you consider interest, even a smaller addition to the main price will become very expensive in the end.

 

Do Not Take Out Other Loans

 

It is very common for many people to get excited about the idea of the new job that makes the purchase of a car possible. With the promise of extra spending money, those people may head out and open up accounts at shopping centers. Remember that each credit inquiry will affect your credit score and every open account will also damage your score. When you need to buy a vehicle and you’re already working with a loan for people with bad credit, you can’t afford the extra hits to your score.

 

Ultimately, you can benefit from the existence of bad credit loans. Just be sure that you are aware of your options and the steps you must take to save money on those loans. Work to improve your credit score and be prepared to work for the best possible circumstances.

The Power Behind Planning Ahead

If you have had experience with buying a car, you likely know it is a good idea to arrange financing before beginning your search for the perfect vehicle. One of the best places to look for car loans is at the financial institution you already use to do your banking. By prequalifying for a loan, you will have a better idea of what your budget is and the ability to make a responsible decision.

 

Bargaining Power

 

Besides giving you a firm budget, prequalifying for car loans also gives you some bargaining power. As a dealership, we work with several different lending institutions in order to best serve our customers and get them the best rates possible. When you show up on the lot with prearranged financing, it gives our salesman a challenge. Their goal is to see if they can find a deal on a loan that will beat what you have already found.

 

Quite often, our lending institutions are willing to give a slightly lower interest rate on a new loan in order to get a new customer. Your hard work will pay off when you get a lower rate than you thought you could. If our dealership is unable to find you a lower rate, you will know for certain you’ve found the best rate available.

 

Comparing Loans

 

When comparing different loans, whether offered by your lending institution or the dealership, make sure you are comparing all of the features. For example, don’t just compare monthly payments. If one loan is for 24 months and another for 36 months, the second loan may have lower payments, but you will be making payments for an entire year longer. At the end of the loan you will likely pay more for the 36 month loan than the 24 month loan.

 

Spending some time doing a little research before beginning your car shopping can save you a lot of time and money. By being prepared, you can rest assured that you found the best car loans available.

5 Mistakes to Avoid When Applying for a Car Loan

There are auto dealerships in various territories and provinces offering car loans, even if you have less than perfect credit. The loan approval process may seem daunting. There are common pitfalls you can avoid that make obtaining auto financing a lot easier.

 

  1. Not Knowing Your Credit History

 

Your credit history plays an important role in the loan application process. For example, your credit affects the interest rate. Generally, the higher the credit score, the lower interest. Get copies of your report from credit bureaus. Identify and correct inaccurate information. Sometimes making these changes can boost your credit rating.

 

  1. Not Knowing the Total Cost

 

Many car buyers only focus on keeping the monthly car payments low. That’s fine, but there are other factors that determine what you can afford. Always include costs such as taxes, maintenance, gas and insurance.

 

  1. Not Test Driving Cars

 

Take cars for a test drive. Think about how and where you drive on a daily basis. Drive the automobile the same way you normally do. Take your time with this process. Don’t rush back to the dealership. Pay close attention to how the vehicles handles.

 

  1. Not Reading the Fine Print

 

It’s not a good idea to sign a loan agreement without reading the terms and conditions. Make sure you understand everything before signing on the dotted line. As a rule of thumb, shop around for the best auto loan.

 

  1. Not Having the Necessary Paperwork

 

There are several documents you need when you apply for a car loan. The most common requirements are proof of insurance, pay stubs and driver’s license. If you don’t bring the right paperwork to the dealership, it can delay your approval.

 

There are reputable auto dealerships in Canada that finance car loans for consumers who have bad or no credit. By avoiding the above mistakes, you increase your chances of getting the quality vehicle you need.

Why a Car Loan Offers More Flexibility During the Shopping Process

The price of today’s vehicles is more than what most Canadians can save without years of effort. Because it’s usually not feasible to wait for years to get a new vehicle, many of them depend on car loans. Securing a loan clearly offers welcome peace of mind because it allows people to pay for their vehicles over time. It also gives them more choices while shopping for the vehicles of their dreams.

 

Car Loans Set Realistic Parameters

 

Whereas some potential car buyers go through the loan process after picking out specific cars, others see what kind of financing approval is possible for their situations and then use that information to guide purchasing decisions.

 

Maybe you’re in the market for a family car. On the other hand, perhaps you want a sporty option that’s the envy of all your friends. Whatever the case, a car loan gives you an idea of which vehicles are within your price range and won’t disrupt your budget.

 

Use Your Loan to Open Up More Possibilities

 

Perhaps you have cash in hand for a car but know the amount isn’t going to result in a car that meets your minimum expectations. Instead of just settling for a vehicle that falls far short of your needs, you can apply for a loan and see if that financing option makes it possible to buy a much more modern vehicle with all or most of the features you love.

 

Car loans let people work out ways of paying for vehicles over time and thereby affording options that are more luxurious, newer or both. Financing is also ideal if you are a very responsible person and know you’ll have no trouble making periodic payments, but just can’t afford the entire up-front cost of your new ride.

 

Make our dealership the first and only stop for information about car loans. After meeting with us, you’ll see that financing could make it possible to buy a vehicle that’s otherwise out of the question.

3 Reasons Why You Can Get a Car Loan with Bad Credit

I am often asked why our dealership approves bad credit car loans. Or rather, why we help buyers with questionable credit get a decent auto loan. There are good reasons why we do this, and I’m happy to share those with you. If you are one of those bad credit buyers, maybe this will give you shopping confidence.

 

  1. Not Every Credit Score – or Buyer – is The Same

 

Two buyers might show up at our dealership with the same credit score. Though they share the same number, I know the reasons why each buyer’s credit score is what it is could be very different. One buyer might be habitually delinquent on payments. The other may have gone through a short-lived financial crisis that he is working his way out of. This bit of information is sometimes enough to secure a loan.

 

  1. An Auto Loan is a Safe Bet for a Lender

 

I’m probably giving away a secret when I tell you that auto loans are generally a safe investment. It is true that if a borrower falls too far behind on his payments, the car can be reclaimed. But that’s not why many dealers want to approve bad credit car loans. In most cases, borrowers will pay back their loan in full. More importantly, if that borrower has a good experience at our dealership, he will recommend his friends and family. That’s the real value.

 

  1. We Want to Build a Relationship with You

 

In most instances, buyers who purchase a new car from us will return over time to purchase another vehicle. Often, those buyers will have worked hard to re-establish their credit and can feel comfortable knowing they can secure a new loan. If we treat that customer right, he may purchase a car for his spouse and his children. We may work together for many years to come.

The Basics of How Car Loans Work

If you’re looking to finance your next car through our dealership, there are several things you should know about how car loans work. We’ve broken the basics into easy to follow sections so you can gain the knowledge you need to get the best deal on your loan.

 

Lowering Your Loan Amount Can Save You Money

 

There are three factors to look at when you’re searching for a new car loan. The first is your actual loan amount that you receive through your financing company. You can lower the amount you borrow by making a down payment or trading in an older vehicle. This, in turn, will lower your monthly payments because you’ll have less to pay back.

 

Lowering Your APR Can Save You Cash Too

 

The next factor in the basics of car loans is your annual percentage rate. This is the interest rate that you negotiate with our dealership. Taking the lowest APR possible will save you money over time by decreasing your monthly payments. Less interest equals less money spent.

 

Stretching Out Your Payments Can Cost You Money

 

The last piece of the financing puzzle is your loan term which can be spread out over 3 – 6 years. You’ll end up paying less per month, but because of the time added on to your loan term, you’ll pay much more money in interest than you would if your term was shorter.

 

Taking a Lower Monthly Payment Can Cost You Extra

 

As stated above, normally lower monthly payments come with a longer loan period. While you pay less each year, you pay that amount for an additional 1 – 3 years, costing you more money over time. Try not to judge a loan based on monthly payments. Consider paying a bit more to save you additional costs.

 

Financing car loans with us is easy if you know what to look for. We’re willing to work with you to get you the best rates you can afford. Just keep these basics in mind and negotiate your best terms.