Spending a large sum of money to buy a car can be a huge burden on your pocket. The cost of purchasing a car is sometimes almost as much as investing in property. The good news is that there’s another way to purchase a vehicle without breaking the bank – taking out an auto loan. An auto loan enables you to drive your dream car home with affordable monthly payments. By taking out an auto loan, you don’t have to worry about spending a large sum of money and paying it in all in one blow. While car loans are a more affordable option than paying upfront for a car in cash, there are still several ways you can maximize your loan for increased savings. Read on for some helpful tips on getting the best auto loan rates.
Monitor your credit status
One of the very first things you need to secure when getting an auto loan is your credit standing. If you haven’t done so in a while, now is the time to check your credit score. This way, you’ll be able to buy yourself some time to work on improving your credit rating if your score is less than stellar. Improving one’s credit score doesn’t have to take long. You can give your credit rating a boost within a month or two if you do the following:
- Dispute any errors on the report (if applicable)
- Pay down revolving debt
- Make payments on time and try to avoid running up credit card balances
- Ask for an increase on your credit limit
Go big on your down payment
Another huge factor that influences an auto loan rate is the down payment amount. If you want to have less interest on your loan, it will help if you can pay a higher amount toward your down payment. Putting more money down upfront is preferable, so if you’re not ready yet, you might as well take time to save up more toward a down payment first.
Take a look at your monthly budget and see if you can cut down on some of your not-so-important expenses. Try to look for a “side hustle” or maybe you can put in extra hours at work. Also, if you have old stuff you can sell, go ahead and sell them. There’s no need to rush if you need time to save more for your down payment. Your patience will be rewarded in the end because you can save thousands of dollars by contributing a larger down payment for your car loan.
Take time to shop around
So, you’re finally ready to secure a car loan. Congratulations! Your credit score has been fixed and your down payment is ready. What’s the next step? Shopping around! To get the absolute best rate, it’s important to shop around and explore your options. As much as possible, try to do your shopping and research within two weeks so that it doesn’t hurt your credit score, as compared to doing it over several weeks.
With the help of the internet, shopping around for auto loan rates is easier than ever. Use this resource so you can go about your research from the comfort of your home.
If there’s one place, you should never skip when shopping for auto loan rates, it’s credit unions. A credit union is a financial institution that functions similar to a bank, except a credit union is owned by its members instead of shareholders. Because credit unions are member-owned, the profits of the organization are enjoyed by its members through perks like low loan rates and high interest on savings, among others.
However, not many people are aware that credit unions are an excellent source for auto loans. Credit Unions are often overlooked as sources of funding for other loans as well. The best thing about a credit union is that it is especially a good option for those who don’t have a strong credit rating. Credit unions work closely with their members and give them the chance to explain their credit situation. This means that the decision of whether or not a loan application will be approved isn’t just based on the information you’ve submitted, but also on the discussion you have with your credit union representative.
Are you looking forward to finally sitting behind the wheel of your dream car? Find out more about auto loans by visiting Calcite Credit Union.