Researching Bank Auto Loans

As one alternative to financing a vehicle on the dealer's lot, consumers routinely go to banks to take out bank auto loans. However, a worsening economy can lead to less generous lending and less banks willing to take on risk from auto loan customers. Researching bank auto loans is very important in order to avoid wasting time applying for the wrong kind of loan or one that you will not be eligible for.

• Go armed with your credit score: One of the first things to do is to check your credit score, fix any potential problems and go to your bank with as clean a credit record as possible. It also helps to build good credit when possible to become more eligible for auto loans in the future.
• Ask about your bank's involvement in the auto loan process: At any given time, some banks will be in the business of giving auto loans, and some will not. Whereas in past days, most banks routinely gave auto loans, the lending practice for many kinds of personal loans has since been curtailed.
• Get the bank's range of interest rates: Bank representatives may not be able to tell you the exact interest rates that they would place on a loan prior to application, but they can give you a useful estimate.
• Ask if your bank has a blank check auto loan policy: Some banks can give out auto loans without knowing up front what vehicle will be purchased. These are sometimes called blank check auto loans; any consumer can use them when visiting multiple dealers' lots. But other banks may require the year, make, model and even the VIN (vehicle identification number) for a vehicle.
• Question the interest rates: If the interest rates seem high, ask your bank why. They may be able to explain specific considerations that caused them to give unusually high interest rates.

These and other practices will help you avoid the wrong kind of loan.