Posts tagged ‘car loan interest rate’

Tips in conducting interest rate car loan comparison

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When you are planning to buy a brand new or used car, you need to perform an interest rate car loan comparison. The existing car loan rates during your purchase influences your plans on how to repay the amount you owe from a lender. This also helps you calculate the entire amount that you need to pay for the interest of the loan. Best car loan rates require extensive research and greater understanding in order to determine how these rates work.

Understand how loan rates are obtained

Before choosing the best car loan interest rate, you need to understand how the rates are calculated. Avoid selecting loans with the lowest APR or interest rates abruptly for these might have hidden charges. Try to determine the differences between the Annual Percentage Yield and the Annual Percentage Rate so that you will have a greater understanding on how to select the best loan rate from everything that is offered.

Use a loan calculator

You can also use an online calculator to help you calculate the interest of each loan.

Will the interest rate of my car loan go down?

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When you are currently stuck in an expensive car loan that would take a few more years to be paid off, you might probably ask yourself

How to determine if the used car loan interest is too high

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Knowing if a used car loan interest rate is too high allows you to search for better loan offers fit into your budget intended for the car purchase. Since different lenders place different amounts of interests on loans that they provide, it is important for you to determine the ways as to how you would know that the rates offered by lenders for financing the used car is higher than what is necessary. This article provides some of the simple ways to determine if the interest rate tied to a used car loan is high and these are written below.

1. Conduct an extensive research

One of the most effective ways to determine if a used car loan interest is high is by researching about the existing interest rates offered by lenders. You can do most of the research using the internet. You can log on to reputable sites that provide used car loan quotes.

A good example of sites that provide used car loan quotes is autofinancing.net. This site is connected to different lenders all over the US and you can actually view some of the loan quotes offered by lenders for used cars in this site. All you need to do is take note of different quotes found on the website and compare this with the quotes offered to you by lenders. Check the interest rates offered to you and those that are offered by lenders connected to autofinancing.net. BY comparing them, you would determine if the rates offered to you is higher or probably lower.

2. Try refinancing your car

In case you have an existing used car loan and you want to determine if the interest rate of the loan is high you can search for refinancing loan offers. As soon as you have obtained a refinancing loan quote, try to compare the interest of the second loan with the interest rate of the first one. If the interest rate of the second loan is lower than that of the first and the margin of the difference is wide, you are actually paying for a loan with a higher interest tied to it. In order to reduce your payments, you should refinance the car.

Useful tips in getting the lowest new car loan interest rate

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Most car buyers are concerned about new car loan interest rates before they purchase their vehicles. The interest rate is important because it helps determine the actual amount needed to pay for the vehicle. Although purchasing a car on cash basis is a good option, most buyers prefer to purchase through a loan since a car depreciates faster each year.

Factors affecting the interest rates

There are several factors affecting the interest rate of the loan. New car interest loans for example are based on the prime rate from the federal government. This rate may rise and fall depending on the situation of the economy of the nation. Due to this, getting the lowest interest rate for new car loans should be accompanied by proper research of the existing prime rate. In case you are planning to purchase a new car through a loan, you should patiently wait for the prime rate to go down. It is on this situation where the banks and other lenders offer low interest rates for the loans they provide.

In addition to this, the loan term also affects the interest rate of the loan. Long term loans have higher interest rates compared to short term loans. Given these factors, you should watch out for the prime rate to go down and go for a short term loan in order to obtain the lowest new car loan interest rate.

Provide a higher down payment

Providing a higher down payment for a car loan reduces the monthly payments involved as well as encourages the lender to provide lower interest rate. Through this you would be paying lower monthly premiums and get the chance to pay the loan off in a shorter period.

Most new car dealers also offer 0% interest rates to car buyers. However, these deals usually require higher down payments of up to 50% or 70% of the car

Factors used by lenders to calculate car loan interest rates

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There are many factors that most lenders use in calculating car loan interest rates. This makes the interest rates one of the aspects of a car loan that is difficult to understand. However, you can somehow obtain a rough estimate of your car loan rate by knowing some of the factors used in the calculation. This article provides some of the factors used in the calculation. This includes the following:

Credit history

The borrower

Secrets in getting the best car loan interest rates

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Car loan interest rates are sometimes too complicated to handle. Failure to manage this rate might cause you to experience difficulty in handling your finances and the worst possible effect of this is that it could eventually ruin your credit history. However, there are several secrets on how to manage these rates well and obtain the lowest interest rates for your car loan. Some of these secrets are enumerated below in order to help you manage your loan