3 Things to Look for in an Auto Loan

Having your personal car is now a necessity, more than a luxury nowadays. It helps you easily go to places, like your workplace, your kid’s school and to church. Public transportation is still appealing for some, but nothing beats the convenience of being able to go to places when you need to at any time that you want.

Unless you have a lot of savings in the bank, chances are you’ll need to borrow some money when you buy a new car. Auto loans are available through a variety of sources, such as banks, credit unions and auto dealer financing. You can also find a great car loan through auto loan companies online, as long as you look for these three things:

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A reasonable interest rate

Since you’re borrowing from an auto loan company online, your interest rate should be about 1-2% less than what you’d get through dealer financing. Search the Internet to find out what the current average auto loan interest rate is, and then compare it to the rate you’re being offered. Watch out for any loan company that seems to be charging an exorbitant amount of interest, particularly if you have good credit and a reasonable down payment.

Low fees and extra charges

Some auto loan lenders will charge all types of extra fees, like application fees, document prep charges or credit score fees. As you compare various lenders, keep an eye out for outrageous or unusual fees. If one online Auto Loan Company is tacking on an extra cost that no other company is charging, you may want to ask to have it waived or choose a different lender. Consider computing the extra charges and fees including in your auto loan purchase. You might want to consider a car lease instead if the charges on your auto loan target are high.

No prepayment penalties

Whatever your loan term may be–three, five or seven years–chances are you’ll want to pay off your auto loan as soon as possible. Many folks send in a little extra with their monthly payment, or they send in an extra payment whenever possible. If there’s any chance you’ll be doing this, make sure your online Auto loan company charges no prepayment penalties. Otherwise, you’ll be paying an extra fee if you pay off your car loan before the loan term is over.

Consider these things when getting an auto loan especially when doing it online. Getting referrals and testimonials from friends and colleagues that have tried getting an auto loan is also a good piece of advice to follow. You might also want to check the after sales experience these companies offer to be able to get the best service and experience out of the auto loan company you would be transacting with in the future.

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