How to obtain low car loan rates

Obtaining a low car loan rate from lenders is easier if you are qualified and by following some of the simple guidelines included in this article.

Tips to obtain low car loan rates

  • Before searching for low car loan rates make sure to obtain the latest copy of your credit report from one of the three leading credit reporting agencies. The credit reporting agencies are Experian, Equifax and Trans Union. These agencies would provide you with free credit report once each year. You can obtain this report from AnnualCreditReport.com. Bear in mind that in order to qualify for lower car loan rates your credit score should be 680 or even higher.
  • Bear in mind you that you would obtain a lower car loan rate if you choose a loan with shorter loan term. For example, your interest rate would be lower in case you choose to finance your vehicle within 36 months instead of financing it within 48 months.
  • You might also reduce your loan rate if you would allow the financing company to withdraw the amount of your car payment automatically each month. Although this might not be a huge discount, it allows you to save hundreds of dollars in the long run.
  • Try to qualify for a loan from a prime lender instead of getting it from a sub-prime lender. Prime lenders usually offer lower car loan rates compared to sub-prime lenders. Start your search by checking reputable websites such as CapitalOneAutoFinance.com, Bankrate.com and LendingTree.com.
  • In case you want to obtain financing from a dealer do not hesitate to negotiate. Make sure to about the existing car dealership incentives, discounts and rebates. Since most dealers are motivated by the idea of being able to sell the car, you might end up paying lesser amounts in the long run by negotiating.
  • Try to provide a down payment of at least 20 percent of the vehicle’s price. Larger amounts placed on a down payment reduces the car loan rate will be. Finally, in case your credit is not good, wait for a few months before getting a new loan. This would give you the opportunity to increase your credit score by improving your credit, save for higher down payment, and allows you to shop for low car loan rate offers.

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