Save Money with These Auto Loan Tips
Buying a car is just the beginning because you have plenty of other phases to go through before being able to enjoy the purchase. The prominent of them all is going for the right auto loan which has an affordable premium with good coverage and designed to protect you from incurring losses. Read this first before you apply for a loan.
Don’t Bundle it With the Total Cost
A common mistake most people do is try to buy the car and the loan at once. If you are not clear about it yet, they are actually two different products that you are going for at once. Ask for a quotation for the car from the dealer and explore banks that offer auto loan. Check the interest rates, additional charges if any and other factors. Comparison sites online help a lot and banks have more offers online than those offered in person.
A Clean No-Debt Helps
If you have at least two different ongoing loans, it is probably best to postpone the car for a while. When you have plenty to pay or have repayment issues in the past, there are banks which would offer easy car loans but they will hike the interest rate to compensate the risk factor. Clear your outstanding debts and check your credit score. If it is bad, avoid damaging it further and take one step at a time.
Limit Your Options
Just because many banks have great offers online doesn’t mean you have to apply for all of them. Getting failed applications could cost on the long run. Limit your options and choose the right bank. Stick with one or two in which you know that you have the best chance of getting a loan approved.
Know about Secured Loans
Most buyers skip this part but their auto loan is a secured loan by default. The car is what the bank bets on and in case you don’t pay your installments for a couple of months, they can seize it. Use the option to your advantage because you can bargain and reduce the interest rate because it is very similar to a home loan where the house is mortgaged to get the money. Unsecured car loans are hardly popular but if there is, it is better to avoid them as interest rates may be high.
An option that some banks provide when you have credit card payments and other dues to be done but also need a car without further delay. The car loan can be consolidated with your credit card. The bank sees it as a proof that you are pledging your car for your other debts. Based on the worth of the brand new vehicle, they may approve it which gets the job done for you but make sure to pay it in time.
Early Repayments not Suggested
Just because you have had a surge of income doesn’t mean you should repay your auto loan immediately. It leads to penalties and additional processing charges. Take your time and pay it in installments until the bank allows you to clear it in one shot.