The Secret to Getting a Low-Rate Car Loan

blog_Secret-To-Low-Rate-CarHave you ever wished that you could get rid of your junker and afford a brand new vehicle at an affordable loan rate? You are not alone. Many people wonder how they can get their hands on a low-rate car loan and start driving the vehicle of their dreams. The truth is, there are basic steps you can take to make it happen, but it requires work and diligence on your part. Here’s a look at how you can get a better loan rate the next time you want to buy a new car.

Monitor Your Credit Report

A good low rate car loan is all about credit. This may seem unfortunate, and might seem an insurmountable hurdle, but it is the truth. You can get there if you work at it, though! Start by obtaining a free copy of your credit reports from all three major bureaus. By federal law you are entitled to this without cost. Examine your credit report carefully. Look for errors. You would be surprised how often mistakes crop up. Report and challenge errors with the bureaus, who have to prove the information or remove it. Closing open lines of credit that you don’t use can boost your score by improving debt-to-income ratio. Work on clearing up small black marks. The more you can clear up the better off you’ll be. Do this every year.

Pay Your Bills

This seems obvious but cannot be overstated. If you have outstanding debt, do everything you can to get rid of it. This is especially true of revolving debt like credit cards. Know the difference between “good” and “bad” debt. Mortgages, student loans and business loans are “good” debt. They show you paying into things of value. Revolving credit like credit cards is bad debt. It is best to clear this from your credit history first. If you have delinquent bills or loans, get current on them and work with your creditors to clear up your credit report. This report is, as previously stated, all-important when it comes to getting the best rate. The more you can get up to date, the better situated you’ll be for a great rate.

Get Prequalified

Shop around with different credit agencies to get prequalified for good rates. This gives you power to negotiate or walk away from unfavorable deals. Work with your bank and credit union to see what’s out there. Be careful, though, not to over-apply, because every application reflects on your credit report and can become a negative mark.

Low Term Loan

The shorter your loan term, the better off you’ll be. Applying for terms of over 60 months shows that you may be looking to buy more than you can afford and you may end up with a less favorable interest rate as a result. Never focus solely on your monthly payment. Focus on the term and total amount of the loan first. If you need a low car loan and your credit is not perfect, we can help. Drop us a line today, and let’s talk!

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