Acquiring a fast auto loan isn’t as complicated as getting a mortgage since the criteria used in car loans are less complex. But still, you would want to know whether you can afford the loan before signing the dotted lines. If you are still a newbie in fast auto financing, you may want to know the requirements for you to qualify for the loan, the interest rates it attracts and how the loan will be repaid.
Car title loans are types of secured loans whereby your vehicle title (either a car truck or motorbike) is given as collateral. You will also be required to pay a fee when borrowing.Thanks to the increment in online lending, you can easily get a car loan without setting foot in financial institutions. You also have the advantage of choosing from different lenders. There are a number of banks that allow borrowers to apply for the loan online. These include Wells Fargo, Chase Manhattan, Sun Trust, Union Bank of California and PNC Bank.
Credit score is among the major considerations when applying for fast auto loans. The higher your credit score the more likely you will qualify for higher loan amounts with lower interest rate. The lender will also want to confirm that you are not burdened with other multiple debts. If there are, the assumption of the lender is that you will have challenges paying back the debt. A debt-to-income ratio calculator is used to determine how much of your monthly income is used in paying various debts. Lenders have different requirements, but to stand a better chance, this number should not be more than 40%. If, for instance, your monthly income is $4,000, your total debt payment for that month should not exceed $2,000.
It is always better to pay a larger amount as a down payment. When you are purchasing a new car, paying at least 20% of the buying price as down payment reduces the risk of owing more amount than your car value. A car depreciation rate is more than 25% within the first year of purchase. If you want to purchase a second-hand car, a 10% down payment is preferable. If you have a poor credit score, paying more amount as down payment will give you the power to negotiate for better fast auto loan rates.
Term is the period in which you are required to pay back the loan. A car cash loan term ranges from 3 to 6 years. There are also shorter or longer loan terms depending on your agreement with the fast auto lending company. If the loan term is long, you will spend fewer amounts as monthly payments. But the trick here is that you will pay more money in the form of interest. This also means that the car will cost you more.
buy an already used car, the purchase price will be lower compared to getting a new car model. But you can still purchase a new car with affordable rates of interest. Here are the reasons why;
Most lenders offer car title loans. But just because you can easily get the loan doesn’t mean that you have to take one. There are also some pros and cons involved.
One late payment will only attract a late payment fee. But if you delay making your payment for more than a month, the late payment may be reported by your lender to credit bureaus. This will reduce your credit rating. If you default on the loan, your car may also be repossessed and sold to recover the money.
Before taking out a fast auto loan, please review different lenders to find the best fast auto loan rates with convenient terms and conditions. If you have a good credit score, there are higher chances that you will qualify for an affordable loan. It may take some time for you to find the best lenders, but it will be profitable in the long run. Not all online lenders will reply to your request within an hour, some may take several hours or even a day. Also, not all fast online fast auto loan applications have a quicker approval. Lenders use different criteria to provide the loan and while some will only take a few minutes in approval, there are others who will take several hours.
These days, there are financial options available to almost everyone and some lenders also provide bad credit card loans. Dealers will try every means to have you buy a car and they also have lenders who are willing to offer financing to car buyers. The only way to know which financing option is best for you is by doing research before committing yourself to a lender. Finding a lender who offer affordable rates can be the best option for you.
When taking out a loan with your car as collateral, you first need to ensure that you can afford to make timely monthly payment. You also need to focus on the value of the vehicle you want to purchase. If you tell the car dealer how much you intend to spend in a month, they may trap you into purchasing an expensive vehicle and increase the loan term to reduce the amount of money you pay per month. Then you will end up paying the loan for a longer period than what you planned for.
As much as you can still get the car without making a down payment, paying an initial amount will reduce the cost of the car. Cars also depreciate at a faster rate. If you get into an accident, the insurance company will only pay for the current car value. This means that you have to find an alternative source to pay the difference between the car value and the remaining balance. If you paid a good amount as down payment, you won’t have to worry about such issues since you will be having some equity in the car.