The ABCs Of Car Loans

What Is Your History?

It does not matter if it is a mortgage or a car loan, your credit history is the most important thing. When you go to obtain a credit based loan for a car, your credit history comes into play. Do you know what your credit history actually is? Many people do not and because of this they run into many different issues. Luckily, the Federal Law requires that the credit bureaus offer you a free credit report every year. Before you apply for any car loans, you should take a look at your free credit report and determine if you have any problem spots that can prevent you from getting the car that you want, that can prevent you from getting the right interest rate and it can ultimately cost you a ton of money because you have to get a subprime loan.

What Is Your Credit Score?

Getting a car loan is all about your credit score, and we have already talked about this before but your credit history is not exactly your credit score. Matter of fact there are often calculated separately and by different companies. FICO if the main company that lenders look for when determining your credit score, well the big three credit bureaus are who they look at for reported information all the debts that you have. Knowing your credit score will let you know which category of borrower you fall into. Any score 680 and above is pretty good credit. Once you dip under 680, you might run into a few problems but all is not lost. There are many subprime lenders who will lend to people who have a credit score under 680.

Look Around

Let’s make this option that you’ve done all of your homework and now you’re looking at lenders. What you might need to do is look around a little bit to find a best one for you. Not all lenders are created the same, and not every last one of them will give you the best terms for your car loan. The problem with looking around is that it can equal a hard pull on your credit report and even that can lower your score. One good thing that you can do is go to one of those Central lending websites where you can explore different credit lenders who will be interested in writing a car loan for you without their preliminary pull on your credit affecting your credit score.

Pay Attention To The Terms of The Loan

You might be able to quickly get a loan, but it might not be for the terms that you really want. One trick that lenders often pull is the ideal payment game. This is where they focus on getting you to the per month payment amount that you like. This sounds perfect but often the terms really aren’t that good. You might be hit with a much higher interest rate any much longer amount of time that you have to pay back your loan. So, pay attention to the details.

Do your homework and you will be able to find the best car loan for you.

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