More and more Americans today are struggling to make timely car payments. Though the numbers are still not alarming, they are certainly on the rise. Experts are advising you to buy an affordable car that would truly meet all budgetary constraints so that you do not contribute to the delinquency statistics.
Your intention is to get the best possible deal while applying for the car finance loans. To achieve the best deals, it is important for you to do some homework. Here are some important factors to consider for getting the best possible car finance deals.
Check Your Eligibility Criteria & Credit History
It is necessary for you to check all your credit scores because you need to have a really good credit history and meet all eligibility criteria for availing the car loan. You must be wondering why the dealership would need my credit reports for. In this context, you must realize that your credit report contains two vital data that are essential for getting a good car loan. They are:
The report presents your financial history. It is actually a record of your capacity to borrow an amount of money and then repay the loan timely. It would be evaluating around 30 diverse credit-related factors like your payment history, exact debt amount outstanding and credit history length.
The credit Bureau is known to be combining all the credit-related factors into a single numerical score called the FICO score. This is known to be ranging from around 350 to 800. The higher the score the better it is. The dealership would be using your FICO score while contacting different lenders for determining if you would be getting a loan and if yes then at precisely what interest rate.
Get your credit report from all three reputed credit reporting agencies namely Experian, TransUnion and Equifax. You could consider visiting annualcreditreport.com that was created by the Federal government, precisely for this purpose. You should be checking all three as you have no idea which credit report would be used by your lender. You should get an opportunity for fixing mistakes if any.
Shop Carefully and Get the Best Possible Rate of Interest
Once you know that you have met all the eligibility criteria for getting the car loan, it is time to shop around for the best possible rate of interest. As rate of interest could be making a huge difference in the ultimate pricing of the vehicle, you must ensure that you are comparing various banks and not simply accepting pre-packaged car loan deals. Browse through http://idealautousa.com/ for the best car deals.
Most people are not in the habit of doing their homework before going to the dealer. Most people settle for the rates offered by the dealer because of sheer convenience or maybe they are lured by the ads offering unbelievably low-interest rates. You must keep in mind that impressive low rates of interest are meant only for people with exceptionally good credit scores. Always check out the community banks and credit unions. They provide the best possible rate of interest on car loans. However, reliable and reputed dealers could also be trusted.
Opt for the Shortest Loan
Cars are becoming more expensive hence, longer loans are available. You could now get a car loan and pay it back in seven or eight or even nine years. Remember longer term would mean reducing the monthly payment. However, it would be pumping up your total cost. You would be ending up paying more over a longer period as these loans are known to have high rate of interest. It pays to restrict your car loan to a maximum of three years. It would imply higher monthly payments but you would be out of your debt much faster.
Foreclosure Charges Are Important
Banks are supposed to be charging an additional amount in case of prepayment of your loan before the expiry of the loan tenure. If you are thinking of paying off your vehicle loan at just one go, the bank may charge you 2 percent to 5 percent of the outstanding loan balance as the foreclosure charges. You must compare the foreclosure charges with different banks.
Author Bio: Jeremy Voss is the owner of a car dealership and a blogger. He loves cars and writes reviews of new cars, posts about where to find great salvage car deals like http://idealautousa.com/ and much more on his blog. He has an impressive fan base.