There are two main types of Auto Loan: secured and unsecured. Secured loans do not require collateral, and unsecured loans have no restrictions on the type of vehicle you can drive. Secured loans, on the other hand, usually have a maximum mileage and model-year restriction. One major difference between secured and unsecured auto loans is the method of calculating interest. Most auto loans have a simple interest rate, and precomputed interest loans are less advantageous if you plan to pay off the loan early. see this
Before applying for a new car loan, consider your income and other recurring expenses. You’ll want to consider your down payment as well as recurring expenses such as car insurance and gas. The length of the loan period is also important, as a longer term means lower payments, but a higher interest rate. Also, don’t overextend yourself and overpay. While you’re making payments on an auto loan, be sure to calculate the total payment of your new car in order to determine whether it’s affordable for your budget.
When applying for an auto loan, you should never apply for one before you’ve decided on the vehicle you’d like to buy. Making too many “hard inquiries” on your credit report can damage your score. To avoid this, contact several lenders and compare their terms. Be sure to ask about pre-approval before making an official application, because different dealerships have different practices when it comes to pre-approval. But don’t wait too long. Getting pre-approved can save you a great deal of time and effort when shopping for an auto loan.
While buying a new car from a dealership is relatively easy and quick, you should still get pre-approved for an auto loan before you take delivery of your vehicle. To get pre-approved for a loan without applying at the dealership, consider utilizing Genisys financing. Genisys financing can get you approved within an hour, without having to submit any additional information. You can even get pre-approved on the spot. And, it’s easy!
The total amount of the loan depends on the price of the car, APR, and repayment period. Typically, you can choose between a 60-month and a seven-year auto loan, but extending the term to sixty months will cost you hundreds of dollars more. And since vehicles lose value fast, you’ll have to pay much more than the vehicle is worth when it comes time to sell it. Choosing a shorter term is the best option for you.
Credit unions are another option for car loans. These nonprofit institutions typically offer lower interest rates than banks. For example, a typical credit union auto loan rate is 1.25 percentage points lower than that of a bank. Not all credit unions are open to non-members. However, some popular credit unions include Navy Federal Credit Union and Alliant Credit Union. All credit unions may be closed to non-members, but they offer competitive auto loan rates.