How Do You Get the Best Auto Loan Rate?
Before the sub-prime mortgage crisis, it seemed to be easier to get a loan for just about anything. Since this crisis, it has become more difficult to secure a loan from banks or other lenders. The reason is that credit scores have become the number one source of determining not only whether you qualify for a loan, but at what interest rate. So how do you get the best auto loan rate? Here are some tips.
- Secure your credit report from the three agencies and ask for credit scores from them as well.
- Scrutinize your three reports very carefully to ensure there are no errors on the report. If there are, notify the credit agency immediately.
- If you find that your credit score is below 700, you will have to try and raise that credit score by paying down credit before you begin the loan process.
- Once you do that, you can research the various interest rate auto loans online.
- Be prepared to give the dealership a large down payment.
Now you may have seen TV ads wherein dealerships are promoting a 0% interest loan, with 0% down. Visit several dealerships to determine if that is, in fact, the case. Find out if you qualify for such a loan and make your decision accordingly.
Credit Scores Determine the Best Auto Loan Rate
Keep in mind that before you finalize the deal, your credit rating and scores are checked by the dealerships. It is then that the interest rates are determined. That is why it is recommended that if you have outstanding credit, you pay it down before deciding on a car loan. The higher your credit score, the less interest you will pay regardless of whether you finance the car loan through the dealership or apply for a loan at your bank.