Financing a used car is a little more difficult than financing a new one. But don’t give up. You should be able to find a good loan to fit your needs with the following tips.
Find Out Your Credit Score
Before you shop for a car loan or visit any dealerships, find out what your credit score is now. If your credit score is good, you should be offered a loan at a good interest rate. If your credit is not so good, you might have to accept a loan with a higher interest rate.
Get Quotes from Different Lenders
There are various places you can get a car loan. The car dealer will probably offer you a loan, but you should still shop around to get the best deal on a loan. You could check with your bank or credit union, and also check some lenders online. Just be sure to read the MaxLend reviews for any online lenders to make sure they are legitimate.
Make a Large Down Payment
It is to your advantage to make the biggest down payment you can. This will make the amount you are borrowing lower so it will save you on interest charges and the monthly payment will be lower, too. It will be easier to qualify for a loan if you make a bigger down payment because the lender will not have as much risk.
Get a Short-Term Loan
Get the shortest term loan you can afford. If you stretch out the loan too long, you will be paying a lot more interest charges than you need to. Also, if your loan term is too long, you may be paying for the car long beyond the time that the car is worth any money.
Think About Getting a Co-Signer
If your credit is not good or you just don’t have a credit history yet, you may still be able to get a loan if you get someone to co-sign your loan. This means that if you can’t pay off the loan, your co-signer will be responsible for paying it. For this reason, someone might not want to be a co-signer on your loan. And you might not want to put someone in that position, either. It is something to consider, though, if it is your only chance at getting a car.
Try To Get a Non-Recourse Loan
If you can’t pay the loan back, the lender will repossess the car. The problem comes in if the value of the car is not enough for the lending company to get its money back. In that case, if it is a recourse loan, the company will require you to pay the difference. With a non-recourse loan, you are not responsible for the difference.
Once you do get a car loan, be sure to be responsible and make all your payments on time. This will help your credit rating and will save you from late fees and possible repossession of the car. Get the best deal you can on a car loan, and enjoy driving your new car!