Low Interest Auto Loans – Tips To Get Lowest Auto Loan Interest Rates

Unless you’re paying cash, it is no wonder that you are searching for low interest auto loans. Getting the best auto loan rates just makes good financial sense.

However it takes a little work to find the lowest interest, simple work that most people are unwilling to do. Here are some tips to get the lowest auto loan interest rates.

1. Low Online Auto Loan Quotes

There are many banks and auto loan companies online that offer competing auto loan quotes. Because of this almost global competition online lenders are more likely to offer you the lowest interest auto loan quote in order to get your business.

Safe, secure and fast you can apply for a auto loan and get approval in minutes. Then you can compare and choose the one with the lowest interest rate. This allow you to shop for a car like a cash buyer, saving you even more.

2. Get Your Credit In Order

Your credit history will ultimately determine how low the interest rate will be on your auto loan. You should know where you stand, credit wise, before you apply for a loan not after. Get your credit report, it’s easy, and by law you are entitled to one free credit report a year or every 12 months, get it. The three main credit reporting agencies are Equifax, Experian, and TransUnion.

3. Know Your FICO Score

This plays a big part in whether you will be approved and the interest rate of your auto loan. Your FICO scores are the credit calculations or scores many lenders use to determine your credit worthiness.

The FICO credit score range is widely accepted to be between 300 and 850, the higher the better. Raising low FICO scores not only can help you get the lowest interest auto loan but will also save you thousands on the total cost of the car.

4. Dealing With Bad Credit

It is not impossible to get a low interest auto loan with bad credit. In a perfect world you will have your bad credit erased, but as you know this can take time. Time which you may not have before you need a car.

In the case of a bad credit history a low interest car loan does not mean best low interest rate available, but lowest interest auto loan for people with bad credit.

You definitely want to have options in this case. Taking the time to research and compare auto loan quotes will pay off handsomely with a low rate auto loan with bad credit that will allow you to be able to afford that car.

In many cases low interest car loans are just a click away. If you can get your credit and FICO score high or high enough then it is just a matter of shopping for the best interest rate for a auto loan wisely. That is right, shop just like you will for a car, even if you have bad credit. Then compare a minimum of 3-4 auto loan quotes online or locally, this will enable you to find and secure the best low interest auto loans that you can afford.

Tips For First Time Car Buyers to Get Online Auto Loans

What Are First Time Buyer Auto Loan Programs?

Whether you are buying your first new or used car or are planning to apply for online auto loans for the first time, understanding how automobile dealerships and lenders see you, and what you can do to improve that image, can help you to be prepared in advance of applying for online auto loans for the first time, so that you will be in a better position to get approved for an car loan with a lower interest rate and better terms. After all, you want your monthly auto loan payment to be the lowest it can possibly be, right?

Who might apply for first time buyer car loans? Some people that first time auto loan programs can help could be:

* Teenagers, personally buying their first car in their own name will need to apply for first time buyer auto loans as they have no credit history behind them

* College students living away from home for the first time frequently have not had time to build a credit history before leaving for school and so will often need to apply for first time buyer car loan programs

* People that have always paid cash for a vehicles in the past, but now want to upgrade to a newer one or are forced to take out automobile loan because they do not have the cash funds to buy a vehicle at present

* Immigrants that have moved here from other countries, and thus have left their credit histories behind, may need to apply for first time auto loan programs in order to start building a credit history

Not All First Time Auto Loan Borrowers are in the Same Boat

The first thing to realize is that not all first time borrowers are in the same boat. There can be a lot of differing factors that can either work in your favor, or against you when you are applying for online auto financing. For instance:

* Are you employed full or part time? If you are not employed, do you have an income? Not being employed is not necessarily a game stopper, but if you plan to have your name on the title of the car and on the auto finance, you will need to demonstrate that you have either a job, regular income, or other funds that you will be paying your monthly auto loan payment from. Of course, the higher that your income is, the easier it will be to qualify for lower interest rate first time buyer auto loan programs.

* Do you have no credit history, because you are just starting out your financial life, or do you have a bad credit history/low credit score because you have had a few credit slip-ups in the past? Dealerships will certainly work with you in either case. However, if you have a low credit score, depending on how bad your credit history is, the dealership may be inclined to offer you a higher rate of interest and a lower credit limit on first time buyer auto loans as opposed to someone that has not made any credit mistakes in their financial life yet.

Note, see our recent article entitled “How to Get Approved for an Auto Loan with Bad Credit if you have Low Income” to learn how to get unwanted items removed from your credit report to bring up your credit score.

* Will you have any funds available to make a down payment on your auto loan? Whether you are applying for first time buyer auto loans, or if you have had auto loans in the past and just need another one now, what every auto dealership or lender is going to take into consideration when assessing your application and the items on this list is; how much of a risk are they taking in making an auto loan to you and what if anything can they get you to do to mitigate that risk. Making a down payment is one thing that you can do to mitigate the dealership’s risk, making them more likely to quickly approve your automobile loan and to give you a more reasonable interest rate. In addition, a down payment will obviously bring down what you owe on the vehicle and so your monthly payments will be lower and more affordable. Down payments are usually not required to get online auto loans, but they can be very helpful when negotiating with a dealership. Even a small down payment can make a difference in how the dealership sees you.

* Is there someone that you know that would be willing to cosign for you on your auto loan? Cosigners are not required in order to get online auto loans, even if you have bad credit or no credit history at all. However, the use of a cosigner can save you a lot of money and make the application process go much more quickly and smoothly. A cosigner is someone that puts their name on your loan application along with yours, guaranteeing that the loan will be repaid. The limit and maximum amount of your automotive loan will be determined by the cosigner’s income and credit standing, not yours. So, if you choose to have a cosigner, make sure to pick one that has a high credit score. With a cosigner, there is really no need to look for first time buyer auto loans because you will be treated by the dealership as though the higher credit score and income were yours.

* What is the ratio of your monthly housing payment as compared to your income? A little known fact is that auto dealerships and lenders pay attention to this number. For instance, if you make $1,000 per month income, and your monthly housing cost is $300, then your housing cost takes 30% of your income. Anything over 40% will send up a red flag to the dealership/lender and they may need convincing that you can make your monthly payments on time. Take this into consideration when you complete your auto finance application.

Taking the above items into consideration, you should be able to get a clearer picture of how automotive dealerships and automotive loan lenders see you, and what you can do to control that image, at least to some extent. Once you have submitted your application, the die has been cast and you will see what the dealership offers you at that point.