Posts tagged ‘loan interest rates’

Useful tips in getting the lowest new car loan interest rate

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

New car loan interest rates: How to obtain lower payments

Obtaining the best car loan interest rates may not be that easy and usually takes some time. What is important is that you are able to complete a good research before going to the nearest dealership to buy the car so that have would be a great chance of getting a good rate. Bear in mind that the rates involved in a car loan vary according to its structure and the credit history you own.

Although you might find the best rates offered by internet based lenders by using autofinacing.net, lending institutions such as banks and credit unions are also capable of providing you with the best loan rates that are available in your area. This article provides you with a guide on how to obtain the best rates from these credit institutions.

Know your credit score

One of the most important things that you need to do before visiting the car dealership is to know your credit score. Review your credit report and your credit score by using MyFICO. Examine all of the information included on the credit report and make sure that all of these are correct. In case some of the information written on the report is not correct, you need to file a complaint from each of the three bureaus.

Search for existing special financing rates

You also need to check the special financing rates offered by manufacturers to their buyers. You can either check the special offers and incentives by checking the manufacturer

Factors used by lenders to calculate car loan interest rates

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