#auto finance rates
Car Loans for Good, Fair and Bad Credit
- Available in all mainland states (excludes AK and HI)
- Online portal shows up to four offers for comparison via multiple hard credit inquiries
- BBB accredited
Here’s how to apply online for an auto loan:
- Once you apply, the lender will check your credit and contact you with a decision, in some cases in less than a minute. Some lenders will do a “soft pull” of your credit, which will not damage your credit score, to pre-qualify you. Later, at the dealership, you will fill out a full credit report for final approval. Other lenders will run a full credit to get you preapproved. In both cases, the lender will offer you a amount you can borrow at a certain interest rate. Some lenders will present a range of interest rates depending on whether the loan is for a new car, a used car or an older used car.
- The lender will then give you a no-obligation check or email you a certificate you can take to the dealership. (Note: Some lenders have restrictions on where cars can be purchased using their loan. For example, some lenders work with a network of dealerships. Other lenders won’t grant loans to buy cars from private party sellers.)
- Negotiate your best deal for the car, being sure to leave enough money to cover taxes and fees. For example, if the loan is for up to $20,000, look for a car in the $15,000 range because the final price will be about $16,500 or higher.
- Once you pay for the car with the lender’s check the loan is finalized at the purchase amount. When using a lender’s certificate, you may be required to fill out a credit application at the dealership which will result in a slight reduction of your credit score.
Preapproval and pre-qualifying help streamline the negotiation process because you can sidestep the car seller’s favorite tactic: the monthly payment game. If you negotiate for a monthly payment instead of the price of the car, it’s easy for the salesman to obscure the real price. But when you are preapproved, you become a “cash buyer,” meaning that you can ignore the monthly payment question and concentrate on negotiating only the price when shopping for a new car .
Here are other points to keep in mind as you shop for an online car loan:
- Apply to several lenders to find your best interest rate. Lenders who only do “soft pulls” of your credit, don’t damage your borrowing ability. But it’s still smart to make all your loan applications within a two-week period to minimize damage to your credit score that can be caused by multiple credit checks over an extended period.
- Be sure to also check the loan terms offered by your bank or credit union. Their rates are often very competitive with online lenders.
- Gather documents you might need before beginning the loan application process: driver’s license, bank account numbers and pay stubs.
- Set up your loan so you pay it off as quickly as you comfortably can. Shorter terms usually mean lower interest rates.
- Be careful: If you’re shopping at a dealership, the finance manager will probably try to “flip” you — get you to use the carmaker’s financing. It doesn’t hurt to hear the pitch, but make sure all the terms — particularly the length of the payback period — are the same so you can accurately compare the dealership’s offer to your preapproved loan.
When shopping for a car loan, it’s important to be realistic. Just because interest rates are low doesn’t mean you should buy too much car. And remember, the most important thing for you, your budget and your credit score is to keep up with the payments and get the loan paid off on time.
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