For you to get the most affordable and favorable car loan for you, take the time to do a little shopping and assess your options so that you don't commit your money to undeserving lenders. Follow the tips below to lower the interest of your car loan:
Tap your home equity. You can actually use your home equity to lower the interest in your car loan. When you use a home equity line of credit or get a home equity loan for your car, you can get a lower interest rate when you apply for your car loan. This is because of the security that a bank can get out of your home equity if and when you are unable to pay them back.
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Go with an independent financer. An independent lender can give you more flexibility for your car loan, as well as lower interest rates, than when you get financing straight from the car dealer. Most of the time, car dealers can make more profit out of your monthly payments because of the high interest rates that they give. When you shop for a car and they ask you how much you can afford every month for the payment, they may bump the interest high enough based on your financial abilities.
Be cautious of zero interest car loans. Though very attractive, zero interest car loans may not be as good as they seem to be. For instance, when you purchase a car worth ,000 and have the option of not paying interest for three years, or instead getting a rebate on a 5 percent interest rate, you would end up being able to save more on the second option. Do your math and do not be deceived by advertising gimmicks.
Up your credit score. A high credit score translates into a lower interest rate. For you to ensure that you will not be burdened by your finances, do your best to improve your credit score before you apply for your car loan. This has a lot of effect on your evaluation and assessment.
Consider getting a lease. This is a lot more affordable than applying for a loan, but has no return or resale value. When you get a car on lease, you would only have to pay around 0 a month. If you go for a leased car, evaluate the contract well and see if it will work for you. Watch out for expensive tax fees, since this can blow up your lease payment every month.
Auto Loans - How To Find Low Interest Car Loans
