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Auto Loan
Auto Loan Basics
Auto loans are secured loans in which the vehicle you’re buying serves as collateral. You’ll usually be required to pay a set interest rate and monthly payment for 24 to 84 months, after which your car will be paid off. Many dealerships provide their financing, but national banks, local credit unions, and internet lenders also offer auto loans.
There are a few different types of auto loans you can apply for:
New Auto Loan: A new auto loan is for cars less than two years old. The interest rates tend to be lower than used cars, and the terms are usually shorter, between 24 and 60 months.
Used Auto Loan: A used auto loan is for cars more than two years old. The interest rates tend to be higher than for new vehicles, and the terms are usually longer, between 36 and 84 months.
Bad Credit Auto Loan: A bad credit auto loan is for people with poor or no credit history. The interest rates are usually high, and the terms are often shorter, between 24 and 36 months.
Refinanced Auto Loan: If you have an existing auto loan with a high-interest rate, you may be able to refinance it with a new lender and get a lower interest rate. This can save you money in the long run.
Cash-out Refinanced Auto Loan: A cash-out refinanced auto loan is when you take out a new loan to pay off your old one and then use the money from the new loan to pay for other expenses.
Lease Buyout Auto Loan: A lease buyout auto loan is when you finance the remaining amount on your leased car so that you can own it outright.
Tips for Applying for an Auto Loan
Know Your Score
Your credit score is one of the most critical factors determining your interest rate. The higher your credit score, the lower your interest rate will be.
Be Prepared
Be sure to have all of your financial documentation in order before applying for a loan. This includes your tax returns, pay stubs, and bank statements.
Get Quotes
Get multiple quotes from different lenders before making a decision. This will help you make sure you're getting the best deal possible.
Ready to apply?
Don’t let yourself be overwhelmed by the process – Credit Card Chest is here to help! We can match you with a lender who offers great rates on new or used cars, so apply today and get behind the wheel of your dream car sooner than you thought possible.
