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Top 5 Tips for Getting Great Deals on Used Car Loans – CARFAX

Top 5 Tips for Getting Great Deals on Used Car Loans – CARFAX


If you are shopping for a car and need to
finance some of the costs there are 5 ways you can obtain a car loan at the lowest possible
interest rate and the best loan terms. 1. They say timing is everything! Interest rates on car loans float up and down
with prevailing economic conditions. Do some research on current rates and key
indicators that can tell you if rates are going to be steady, rising or falling in the
near term. So if you are not in a super hurry to buy
your car you might get a lower rate simply by waiting for the right time to take out
a loan. 2. Know your credit score Banks lend money at interest rates that match
their level of risk – they use credit scores to determine that risk. If you have a history of meeting all your
financial obligations on time and you don’t carry too much debt in relation to your income
you probably already have a high credit score. Keeping that credit score high will keep your
interest rates low. Find out your score before you borrow for
your next car. 3. The higher the down payment the lower the
interest rate This is called “Loan to Value” ratio. That’s a fancy way of saying that the more
money you put down the more secure a bank feels when lending you money. Typically, the more you put down, the lower
your interest rate and your monthly payments. 4. Get a co-signer When you’re a young person just starting
out and haven’t established a positive credit record sometimes you have to help banks know
you are not a high-risk borrower. That’s where a co-signer becomes necessary. Think of a co-signer as a referral from a
friend or family member who is also willing to guarantee the bank that you are worthy
borrower. Without a co-signer you may not get the loan
at all or if you do the interest rate will be off the charts high making monthly payments
that much tougher to maintain. 5. Shop ’til you drop Banks are competitive and they make money
by lending money. They really like auto loans because the car
itself is collateral for the loan. So shop around – make sure each banker you
speak with knows that you’re comparing rates and terms at other banks. You’ll be delighted to find how much they
want a customer like you and how willing they will be to offer
you a great car loan.

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