Car loans can be acquired in a variety of places and just like any other type of loans, there are good and bad car loans. Without some investigation, people are bound to end up with a loan from the latter category. However, with a few tricks, you can easily get on the safe side. Let’s take a look at some of the things you can do to ensure you’ll get proper car loans you won’t overpay on. Check out the following list to find out how to get good car loans:
Don’t Go Straight to the Dealer
It might look like the best thing you can do, but it isn’t, at least until you’ve made sure the dealer can give you the best terms. You should consider non-dealer lenders, as well. Compare their loans and do the math.
You could get a much better loan from an outside lender. Why? Because this lender could be more open to negotiating the terms of the loan than your dealer. Plus, dealers always do everything they can to make more money off of you.
This means the loan you’ll get from your dealer could potentially have a higher interest rate.
Know that “Special Offers” are not that Special
Dealers try to attract as many customers as they can with all sorts of “offers”. For instance, you might be tempted with free-of-charge maintenance on the car for a certain period of time. All these deals look cool at the first glance, that’s true, but they’re not as efficient as you think they are. Why? Because the price of the car stays the same, so you don’t save a dime.
Moreover, the price of the maintenance you’d get by agreeing to those car loans is already more expensive than the one you’d get by driving down to your local service.
Consider Making Extra Payments
The sooner you pay off your car loans, the sooner you’ll be released from debt and able to save for anything else. Anytime you get some extra money, use it to cut a chunk out of your loan. You’ll pay it a lot faster than you would by sticking to the repayment plan. Don’t waste that money on things you don’t really need at the moment. Do the right thing and help yourself dissolve that debt.
You’ll be able to go on that trip after you’ve gotten free from debt.
Stay Away from Obscure Fees
Obviously, you’ll have to pay at least a fee when you get a car loan – the application fee. However, many lenders offer car loans that are coupled with all sorts of fees that don’t really make any sense. First of all, every fee associated with your car loan should be specified in the contract. If it just appears after you’ve signed it, you can be sure the lender is trying to rip you off. Read the papers carefully and ask about any extra fee that might appear in them.
Don’t Choose a Variable Rate
A variable rate is good in only one instance: when the interest rates are low in general. But what do you think it will happen to the rate if rates generally go on an upward trend? Yes, you’ll pay more. If possible, try to get your car loan at a fixed rate. Even though it’s quite high, you at least get some peace of mind knowing there’s no risk it will go even higher. There are many people who fall into this pitfall.
That’s because they are greedy and think a variable rate is synonymous with low interest rate. And it is not, needless to say. A fixed rate is much better.
There are hundreds of lenders both on the Internet and physical locations like banks and credit unions. Do yourself a favour and don’t get the first loan you stumble upon. All lenders have their own way of doing things. With a little research, you can be 100% you’re getting the best loan, indeed, not something that looks like the best loan. Compare multiple loans to get an understanding of how they differ, so you know what makes a loan good and what makes it bad.
Car loans can be difficult to manage if you don’t do some research prior to getting them. Some lenders will do anything they can to make as much money as possible off of your back. By comparing loans, though, and familiarising yourself with the market, you can decrease the risk of getting a deal that will create more problems than it will solve. Bad Credit Loans can be your go-to source of affordable and easy-to-manage loans. Contact our friendly team today and you will be the beneficiary of the best deals on the market at the moment.
And don’t forget that research is the key to a good financial future.