What To Know Before Applying For Auto Loans

Published on October 18th, 2019

If you are looking to get a car, make sure you are shopping for the lowest interest rate on your auto loan as it helps you save money in the future. Many people need an auto loan near Melrose Park to pay for their car, so make sure you are aware of the following tips.

 

Interest Rates

Your interest rate depends on your credit score and income along with the length of the loan you choose. When determining what type of loan you can receive from a lender, your credit score plays a big role in the decision process. If you’re ready to visit a lender, make sure you know what score they care about and then figure out which report to request. Make consistent and on-time payments for your loans and your credit score will improve, leading to the potential ability to refinance your car loan to get a better rate.

 

Loan Terms

Did you know that some lenders can offer loans for up to 84 months? That’s a seven-year loan. While this may relieve stress on payments, it’s actually better to pay off a car loan quickly due to car depreciation. You want to avoid owing more money than the car is worth because that puts you in a risky financial spot.

 

Credit Pull: “Soft” vs. “Hard”

A “soft pull” of your credit is used by lenders to pre-qualify you for a loan, which doesn’t damage your credit score but also doesn’t guarantee that you’ll be approved. A “hard pull” may temporarily lower your credit score by a few points, but your final rate can differ from your pre-approval quote.

 

Restrictions

If you know what type of car you want, make sure you go to a lender that will work with this dealership, as some of them won’t lend money. Other lenders can also exclude some makes and models of cars, types of vehicles, and even electric cars.

 

Funding

When you have received your finalized loan, the lender will offer you one with a maximum amount with a stated interest rate. You may receive the money in one of many different ways—from a no-obligation check to a direct deposit in your bank account, we are ready to help you get the car you want.

 

Contact LCU

If you are ready to buy a new car today, contact us to figure out how to get the money you need to finance the car. We look forward to working with you to make sure you receive the right auto loan near Melrose Park and get you on the road!


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