If you are planning to purchase a new car, there are a few things that you should know before applying for an auto loan to finance this purchase. Taking the time to review the three facts below can help to ensure you get the financing you need, minimize any negative impact on your credit, and allow you to easily pay off your new loan a bit faster.
Read below for more information on vehicle loans.
#1: It Is Always Beneficial To Get Pre-Approved Whenever Possible
Each time you apply for financing of any kind, an inquiry is made on your credit report. If you have too many inquiries in a short amount of time, you will likely experience a decrease in your credit score. This can make it more difficult for you to get the financing you need or to secure a favorable interest rate. That is why it is always a good idea to get pre-approved for an auto loan through your preferred lender before heading to the local dealership. This will help to ensure that you only look at vehicles that are in your approved price range. This will also help you to avoid any unnecessary inquiries on your credit report when applying for financing through the dealership.
#2: Not All Automobile Loans Will Require You To Have Good Credit
It is quite common for people to simply assume that they will be denied an auto loan if their credit is less than perfect. However, many dealerships offer financing that is designed specifically to meet the needs of people with fair or even bad credit. Unfortunately, these bad credit loans will often have higher interest rates. Consequently, you will want to consider refinancing your automobile loan as your credit begins to improve.
#3: Paying Bi-Weekly Can Help You Pay Off Your Auto Loan Faster
A great way to save some money on the purchase of your new vehicle is to pay off your loan faster than you are required to. The faster you pay off your loan, the less you will pay in interest charges. A simple way to pay off your loan faster is to make bi-weekly payments rather than monthly payments. This will also reduce how much you are paying in interest since the principal of your loan will be decreasing every two weeks.
Reach out to a company like the Credit Union of Denver to learn more about automobile loans.