Most people, especially young professionals dream about getting their own car. Not only is it convenient for transportation purposes, a nice and new car can always add to a person’s charm and social standing. Landing a date with your crush can be more likely if you have a car with you. The only problem is, cars are not cheap and the upkeep can be pretty costly too. One should always carefully consider and study their finances before deciding to buy a new car.
Now, if you are really dead set on getting a new car, despite not having the cash, then you can always get a loan. While loans may be scary and quite intimidating, you will be surprised at how car loans today are more simple and convenient than in the past. As long as you put effort into a little bit of planning and some time for window shopping, then you will surely get your dream car in no time. With that in mind, below are 5 tips to getting a loan for a new car.
- Know your Credit Standing
The very first step that you should know before shopping for loan offers is your credit rating. Credit rating is the score that credit institutions and other regulating agencies assign to you based on how much debt you have, and how timely you pay them. Debt amount, number of times of you applied for loans, and how many times you have been approved and rejected also plays a part in your credit rating. If on the other hand, you are applying for a loan for the first time, then the bank or any credit institution can estimate your credit rating based on your income and expense. The key here is to have a good credit standing. You see, if you have a good credit standing, lenders will offer you with lower interest rates. And lower interest rates will obviously make it easier for you to pay in time.
- Get as many quotes as possible
When shopping for car loans, do not stick with 1 creditor only. There are many companies – banks and private lenders that offer various car loans. If you have a good credit standing then they will be more than willing to sit down with you and get you to apply for a loan with their company. When shopping for a loan, compare their interest rates, amount of loans and terms with the other quotes you get from the other companies. Do not commit immediately, just say that you will be back after thinking about it. You can also negotiate with the lender by showing pre-approved loan applications and ask them if they can match or beat the other lender’s offer. Take advantage of your position and bargain for the best deal possible.
- Check out online lenders
Today, with the breakthroughs and developments in the information technology, there are now online lenders that can offer competitive car loans for you. In fact, some financial experts recommend getting loans online as they offer lower interest rates than traditional banks and private lenders. Plus, the process can be fast and can be finished in a single day. If you want to visit a reputable online lender, visit exceloregon.com and be amazed on how accommodating can they be.
- Keep the term as short as possible
When discussing the terms of your loan, always go for shorter terms. As long as you can afford, then always go for a shorter term. While shorter terms may cost you more monthly payments, it will help you finish the loan faster and keep the interest lower. Think about this, the longer the term gets, the more interest the lender earns – meaning more expenses on your part.
- Down payment
Always pay a partial payment when getting a new car loan. Getting a new car without spending is very risky as the monthly dues plus interest will be very expensive for you. Think about this way, the interest will be based on the principal amount, thus, an untouched principal will always yield the maximum interest possible, while if you pay a down payment, the interest will be significantly lower.