You are all set for work this morning. You get into your car and take a huge whiff of that new car smell. You turn it on and the engine sounds exquisite and welcoming. You floor the pedal and off to work it is. While listening to your favourite song, a call interrupts you and reminds you that you have missed a payment on the car! That ruins everything…
When not shopping for the right kind of car financing, you can find it difficult to make the payments on time. Not making the payments can then result in your car being repossessed and your credit score reaching a new low that you didn’t even know existed.
Getting a car loan is perhaps one of the most important things you will do in your life. Most people are not able to finance a car on their own as it is a huge payment and a setback in your savings, which ultimately has them searching for good car loans.
Let’s take a look at a few things to keep in mind when taking out a car loan:
Choose the type of loan carefully
When choosing bank loans, make sure you have compared the loan you are being offered to others. Auto finance is one of the biggest finance businesses and the market is quite competitive. You may be able to get a better deal with other lenders.
When considering dealership financing, ask about every payment that will be associated with the loan that you are taking out, such as the interest rate, the down payment, the duration of the payment. Most of the dealerships tend to give good deals that look like a steal initially but their contracts can have you paying for a very long time.
Calculate everything carefully before you make your decision of going with a certain loan.
Keep a tight check on your credit history
Your credit history is the main thing that allows you to take out a loan on good terms and conditions. Before applying for a loan, have copies of your credit history with you so you have an idea of how good an option you can get from the lenders.
Another important thing to keep in mind is that whenever you apply for a loan, either if you go with it or not your credit score tends to go down. Applying for all your loans in a period of two weeks is considered a single inquiry so try to limit your application time within 14 days.
Read everything carefully
Makes sure you have your glasses on and are reading everything in the fine print. The lender will promise you a lot of good things but if they are not in writing, you cannot do anything about it after signing the contract.
Read every condition that comes with the loan.
- Check for Mandatory Binding Arbitration. These three words can restrict you from going to court for anything regarding the loan or the lender.
- Check for the highest payable amount and if it is something you can’t afford, you should not consider taking the loan.
- Check the amount for the penalty of early repayment
Finding a good lender is more like finding the one that will hurt your pocket the least. Good lenders usually explain everything to the borrower in full detail and do not hesitate to explain the difficult jargon that is in the contract. A good dealer is the one you can trust to guide you well.Learn More