Budget
The first step in securing the best auto loan is figuring out what you can afford to spend. Calculate your monthly expenses, including bills, mortgage payments and groceries before deciding how much you want to borrow. It’s essential that you can keep up with your auto payments each month.
Credit
Just as with home loans, good credit will make the auto loan process go much smoother. Your credit history dictates your reputation as a borrower, letting lenders know if you’re responsible enough to manage your finances and repay your loans. Your credit report covers everything from bill paying to credit card use, so it’s important to make sure all aspects of your credit history are in order.
US consumers are entitled to one free copy of their credit report each year, so take advantage of this and review your credit. If you find any inaccuracies, it’s your responsibility to dispute and repair them. Bad credit can make it much harder to receive an auto loan, and can make it more expensive in the process, so take the time to ensure your credit is accurate and healthy.
Shop
Finding a bargain means taking the time to explore your options. Jumping at the first opportunity for an auto loan can cost you money and leave you with a serious case of buyer’s remorse. Not only does the internet put the wide world of auto loans at your fingertips, it makes it easier than ever to compare prices.
Look for the best financing. Credit unions often offer better interest rates and more generous loan terms to their members than are available from other financial institutions, making credit union auto loans a favorable option.
Insurance
While by no means mandatory, showing a lender that you’ll have the ability to pay off a loan, regardless of what happens to you, can go a long way toward closing a deal. Having disability insurance and life insurance will show that even in the unlikely events of major illness, injury or death, your loan payments will be able to continue.
Penalties
Depending on what type of auto loan you choose, you may face charges for paying early or making extra payments. Take the time to find a lender who won’t penalize you for paying off your debt quickly. If you’re unsure about whether your loan has penalties, be sure to ask and also make sure you read the fine print in the sales and financing contracts. For more information, visit www.macu.com or call 1-800-748-4302.
This article is sponosred my Mountain America Credit Union.