So you’re a big boy thinking of buying a toy? Great! Pat yourself on the back; not many make it this far. However, I will not lie: this endeavor is not as easy as you might perceive it. In fact, it is very exhausting. At least, you’re lucky to have some places where you can get the financial assistance. It might be the credit union, an auto finance body, your bank or a car title loan. To help you with it, here are some tips on what you should remember when making that car loan:
You must review your credit abilities before settling on a car loan. Talk to a financial expert and let them estimate your credit standing. From this review, you can decide to get a loan for a new or second-hand vehicle. In short, buy what you can pay comfortably.
Know your credit worthiness
You can save yourself time and embarrassment if you know your credit worthiness before applying for the auto loan. If you find that your credit history is poor, do not bother asking your bank or other financiers who are strict with it. You can go for other options like credit organizations that do not require rich credit histories. Consult a financial professional to know your worthiness so you can choose from the options that you qualify.
Look beyond the present
Be careful with the type of auto loan you choose. For example, do not rush into getting a car because you have to pay a lower down payment. If you think deeper, you will find out that your interest rates will be higher. It will also increase the total amount you have to pay for the vehicle. Therefore, think twice before settling on a deal.
Negotiate the purchase price before the instalments
This is a mistake that most people looking for car loans make: they start negotiating the monthly instalments instead of the purchase price. If you do this, you entrap yourself at the expense of the dealer. A monthly car loan allows the service provider to hide additional costs like add-ons and inflated interest rates. To be safe, bargain on the purchase price then settle on the instalments.
Minimize your loan shopping period
I am sure you did not know that each time you apply for a loan, it lowers your credit score. In turn, it makes it harder for you to qualify for a prime-rate loan. The trick is: make all your loan applications within two weeks’ time. In this way, they all count as a single inquiry and will not affect your credit score.
Read the print thoroughly
Never make the mistake of finalizing a car loan deal without reading the paperwork well! The terms and everything else about your deal are stipulated there. Therefore, read each and every statement in it. If the service provider is unwilling to let you read the terms yourself, walk out on them. This contract once signed, might affect your life in the next few years. Therefore, be keen and make the informed choices lest your auto loan turns into a regret.
With these tips in check, big boy, you can go ahead and purchase that big toy for yourself. I know how much you’ve waited for it!