When looking at various loan options, some people decide that balloon payment car loans might be best. But running around to a bunch of banks, trying to find one that will work this kind of loan out is tiring and tedious. Luckily with the information age and the Internet, this kind of search is more a matter of clicking and typing than walking and waiting. Using online search technology can make finding a balloon payment car loan simple and quick. But first you should make sure you understand what exactly is entailed with this kind of loan.
The general purpose of a balloon payment loan is to limit the monthly payment required by deferring a larger chunk of the loan until a later stage in the loan’s term. For example, if it is important for your monthly payment to be under five-hundred dollars, but a normal loan would put it at six-hundred, you can pay the five-hundred a month for the first thirty-five months of the loan’s term, and then pay, say, two-thousand in the final, thirty-sixth month. Obviously, this can be beneficial, assuming you carefully budget and are prepared for that final payment.
Know the Track Record
As with any loan, finding a good balloon payment loan begins with finding a responsible lender with a proven track record of providing honest, excellent service to its customers. Again, the Internet will help you here. Search for reviews of any potential lender, both in mainstream media and in consumer forums devoted to auto finance. Knowing how a company has acted in the past is your best bet for guessing how they will act in your case.
Know Your Own Situation
Before you start applying to the lenders you find, it is a good idea to consolidate all of your relevant information to have ready when you are filling out the applications. This includes your desired monthly payment, acceptable interest rate, and how much you can reasonably budget for that final, balloon payment. Be conservative with your math, as you don’t want to be caught in a bind when that balloon payment comes. This is the most common mistake people make when opting for a balloon payment loan, so be careful.
Pick and Choose
Once you have all your information laid out, and you know which lenders are going to be your best bets, it’s time to actually start applying. Remember to take your time, and pay close attention to the applications. Don’t go simply for quantity of applications, especially if there is a fee associated with each. Only one of them is going to be your future lender, so give each application the attention you’d give to the person who is going to hold your loan until it’s paid off.
The main things to keep in mind when looking for a balloon payment loan are: research the loan companies and keep an eye out for the bad apples of the industry. Know your own financial situation and keep a summary handy when making your decision. Take your time when applying.