Car Loan - Tips Can Help Drive Smart Loan Deals
But a less-publicized automotive trend – rising interest rates – will make 0-percent car loans a rare breed in 2006. Increasingly, consumers will need to comparison shop for their car loans before they go to buy, just as they do for the vehicles themselves.
According to Bankrate.com, interest rates on new car loans rose steadily throughout 2005 and the pattern is expected to continue into 2006. The difference of just two percentage points on your APR can either save or cost you more than $1,400 over the life of a typical loan.
"Many consumers do not realize that they have other options for financing their car, outside of the dealership," said Brian Reed, vice president of Capital One Auto Finance. "There are some great options for consumers to finance their car on a direct basis, versus relying on the dealer to provide that service for you."
Because education is the key to getting the best deal when financing a car, Capital One Auto Finance offers prospective car buyers the following helpful tips:
Set a realistic budget. Choose a vehicle that won’t overextend you financially. A general rule of thumb is that no more than 15 percent to 20 percent of your total monthly budget should go toward all your car-related expenses.
Verify your credit record. Order a copy of your credit report to ensure it’s accurate and in good shape. Correct any errors before applying for a loan.
Comparison shop for loans. Check out credit unions, banks and online lenders to see what rates are available in the market, so that you know a competitive rate when you see one. Visit Web sites such as www.bankrate.com and www.capitaloneautofinance.com.
Arrive with financing in your pocket. Having approved, no-obligation financing in hand gives you a competitive advantage when you go to buy, giving you the power of a cash buyer. If the dealer offers a better loan rate, you can take it with no penalty.
Approach your purchase as three transactions. It’s best to treat each part of the purchase separately: 1) financing; 2) trade-in; and 3) vehicle purchase. This will simplify the process and maximize your negotiating opportunities.
Match length of loan to expected length of ownership. Select your loan term based on how long you plan to own the vehicle. Buyers who take out longer-term loans can find themselves “upside down” on their loan (owing more money on the car than it’s worth in trade).
Review your financing terms carefully. Make sure you know your interest rate, monthly payment, amount you are financing, the length of your loan and your trade-in value.
“If car buyers would spend just a fraction of the time researching their auto loan as they do the latest features on their new car, they’d be surprised at how much money they could save,” said Reed of Capital One.
For more information about loan, please visit http://www.dezeinfo.com, which is a loan site with a lot of useful loan information on many different types of loan, and many useful loan tips to help you to avoid loan scam.
How to Get a Loan Online in Three Easy Steps
These days everything you once did in person, you can now do online. That includes getting a loan. You no longer have to trot down to the bank, wait in line for for that all-embarrassing discussion about whether you are able to get a loan, or not. These days you simply need to log onto the Internet, locate a lending company, and fill in the online application form.
STEP NO. 1
The first step is easy. You make a cup of coffee or tea, take up a pen and a piece of paper and record what your needs are. Identify what you want. Do you want to pay off old debts? In that case analyze what you owe and come up with a total. This is the sum you want loaned. Or maybe you want to purchase a home or make an investment. Analyze what amount you could reasonably repay and come up with a total. If you aren't sure how to do all this, go online to search for loan calculators; these can help you process how much money you need and give you an idea of when you'll be able to repay it.
STEP NO. 2
Log onto the Internet. Basically, you are searching for an online company that either gives loans or can act on your behalf by finding other brokers that fund loans. Do not rush this step. Once you locate suitable brokers or loan companies take your time and read through all the documentation online. Find out about interest rates and other costs.
STEP NO. 3
Once you've identified the above, you are ready to begin your online application process. Do make sure that you've arrived at a secured site before offering any personal information in an online loan application. Also, be prepared to send further documentation by mail or fax once you complete your application. You may even need to speak with someone on the phone, but once you've filled in your application, the rest is a breeze.
Car Loan After Bankruptcy: Qualifying
If you are planning to apply for a car loan after bankruptcy, there are two key items you need to focus on:
1) Increasing your chances of qualifying for a car loan after bankruptcy
2) Reducing the interest rate on the car loan after bankruptcy
Let's look at each item in more detail:
1) Increasing your chances of qualifying for a car loan after bankruptcy
One way to increase your chances of qualifying for a car loan after bankruptcy is to increase your credit score.
How do you increase your credit score? One way is to update your credit reports. This means removing any inaccurate or obsolete negative information from your credit reports. This will take an investment of time on your part - but if it means the difference between qualifying (or not) for a car loan after bankruptcy it can be worth the effort.
Another way to increase your credit score is to add positive items to your credit report - but few people know about this technique. There's not enough room to go into it here, so I'll save that for another article.
In After Bankruptcy Credit Solutions I go into detail on a number of ways you can increase your credit score. While there isn't enough room to cover all of them here, or any of them in detail, hopefully this gives you an idea of some of the steps you can take.
Another way to increase your chance of qualifying for a car loan after bankruptcy is to increase the amount of your down payment, or look at a lower price car.
For example, let's assume you have $1,600 for a down payment on a car and you're looking at a $16,000 car - that's a 10% down payment. But what if the lender won't approve the loan because the down payment isn't large enough? See what they can do if you consider an $8,000 car. Now your $1,600 represents a 20% down payment. In addition, everyting else being equal, the payment on your car loan after bankruptcy would be lower if you finance it for the same period of time.
Next, let's discuss some ways you can reduce the interest rate on a car loan after bankruptcy...
2) Reduce the interest rate on the car loan after bankruptcy
Here's where increasing your credit score pays off again! Why? if you are able to increase your credit score enough to reduce the interest rate you pay on a car loan after bankruptcy, you could save $100s or even $1,000s of dollars.
For example, let's use a $15,000 car loan after bankruptcy as an example. Let's say you increase your credit score enough so that you receive an interest rate of 11% instead of 14%. Over the life of the loan you will end up saving about $1,067 in interest - that's money that stays in your pocket!
There are other ways to lower the interest rate on a car loan after bankruptcy - increasing your credit score is just one of them. For example, there's another technique you can use to reduce the interest rate you pay on a car loan after bankruptcy - and it can save you up to $100s of dollars (or more). There's not enough room to cover it here, but it's a powerful technique if you don't have time to increase your credit score, and need to finance a car immediately. I go into detail on it in After Bankruptcy Credit Solutions.
Now you know some specific techniques you can use to increase your chances of qualifying for a car loan after bankruptcy, as well as potentially reducing the interest rate you pay in the process!
Copyright (c) 2006 Innovative Solutions Publishing, Inc. All rights reserved.
DISCLAIMER:
This information is designed to provide only a general overview of the subject matter herein.
This information is provided with the understanding that neither the publisher nor author is engaged in rendering legal, accounting or other professional advice. If legal or other expert assistance is required, the services of a professional should be sought.
Neither the publisher nor author shall be liable for any loss or damages, including but not limited to special, consequential, incidental or other damages, caused by the information contained herein.
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