The Best Way to Get a Loan for a New Car

January 27, 2012

The best way to get a loan for your new car is by having a solid income and credit history. If you have a good income level or credit history, then you will get a better loan than people with bad income level or credit history.

Shop Around 

Another way you can save money on your car loan is by shopping around. If you go to a few places, then you will miss out on the other big deals. You may be stuck with a loan in which you would have to pay large installments with a high APR. If you want to check online, then you can go to Bankrate.com, where you can scan the best rates available.

Be Pre-Approved

Also, when you go to the dealership to get a loan, get pre-approved elsewhere. That will easily get your a better deal, because the dealership can trust you. 

Check Your Credit Rating

If you know your credit rating, then you can easily tell if the lender is giving you a fair deal or not. You can get your credit report from AnnualCreditReport.com

Give Down Payment

Do not sign up for no down payment. Down payments easily lower your APR and your monthly installments. If you have no down payments, then you would have to pay higher interest rates and bigger monthly installments. Also, if you make no down payment, you would be paying more in the long run, because the loan will be much bigger than the actual value of the car. That is called being upside down in a loan.

Choose a Short Term Loan

With a short term loan, you will pay less interest, and that will save you a lot of money. if you choose a long term loan, then you would pay small monthly installments, but you would have to pay higher interest. 

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