When you are considering getting a used car loan it is best to shop around and obtain several quotes because car loan rates vary greatly. Luckily, the Internet has made this task easy. Simply go online and search for a specialist motoring website where you’ll see car loans online and be able to get all the quotes on one page. You can now start comparing quotes as all the key facts you need to make an informed decision such as interest rates, total cost and any other fees are usually provided with the quotes.
Your choice of car loan will depend on the car you want to buy and your credit rating. If you have a good credit rating you will benefit from cheaper interest rates. However if you have a bad credit rating then you might have to consider a bad credit car loan. If you are considering buying a second-hand car then you could consider an unsecured loan; which is a good choice if you are able to take advantage of the interest free period. Lenders usually offer a six month interest free period, and if you don’t have to borrow a large sum of money and are able to pay within the interest free period it is definitely one of the cheapest ways of borrowing money. If you can’t pay back the loan fully during the interest free period you will have to look at the cheapest car loan rates. The rates are generally higher if one has to revert back to the standard rate.
If you need to lend a large sum of money and keep the payments down by spreading them over a longer period of time, a secured loan is the answer. This is a good choice if the car is brand new from the showroom and the interest rates are generally lower than with an unsecured loan. However the longer you take to repay the loan the more interest you pay. The major downfall of a secured loan is that the loan will be secured on your property, and if you can’t keep up with the repayments you could lose everything you have secured on the loan.
A lot of car dealerships also offer car loans but in most cases this is not the route to follow as it will cost more than getting a loan yourself. Also don’t be fooled when they offer you “special deal” for one day, because this deal won’t come with the best car loan rates.
Using a car loan calculator you can easily determine the monthly repayments you’ll have to pay on a certain loan as well as what total loan you can afford based on the payment period and monthly repayments. You can find a car loan calculator on a bank’s website, car loan service providers etc.