Are you new to the car buying process and wondering how it all works? We’ve got some auto loan tips for you.
Many people think that your only option to finance a car is through a car dealership, but that’s not true. Most financial institutions like banks or credit unions offer auto loans that you can get pre-approved for before heading to the dealership. That way once you get there you already know exactly how much car you can afford and how much your payment will be. Knowing this information is key to getting into a car that best fits your budget.
At Alltru Credit Union, you’ll work with a lending expert who’s dedicated to getting you into the best auto loan. We offer a variety of auto loan options to fit your budget.
Before choosing a car loan, it is important to know what factors make up an auto loan and how they affect your monthly payments. These factors include:
- Loan Amount: The principal amount, or the amount of money you borrow.
- Annual Percentage Rate (APR): The total interest charged to the loan amount.
- Loan Term: The period of time you have to pay back the loan.
The interest rate and the length of the loan period will depend on the financial institution that you use. It is important to understand how these three factors can impact your overall payment and what to consider before borrowing.
Check your credit score.
Credit plays a key role in applying for loans. Your credit score is one way that lenders will determine the interest rate of your auto loan. If you believe that your credit score is low, examine your credit history to see where you can make improvements before applying for a car loan. Not only does a good credit score increase your approval ratings, but it may also lower the interest rate on your loan. If you happen to have colorful credit history, don’t worry, there are options for you too. Come see us!
A lower APR (annual percentage rate) may save you money over time. The higher the percentage rate, the more money you may spend on your vehicle. Credit unions often offer lower loan rates. Taking the lower APR will save you money on your auto loan. The lower the APR the lower your monthly payment will most likely be.
If you are curious to see how different APR rates can impact your monthly payment, Alltru provides you with an auto loan calculator you can use to get an estimate.
Consider a down payment.
If you can, you should consider putting a larger down payment on your new car. A down payment not only alters the total price of the car but also lowers the amount of loan money you would need to pay it off because you reduce the total loan amount. A down payment can also get you the car you want within the monthly loan payment amount you need to be in.
Let Alltru help.
The biggest benefit of using Alltru is that you’ll work with an auto lending expert who can help you get the best deal possible for you and your family. You’ll get pre-approved to shop for your new car with confidence. Hope these auto loan tips helped!
Take the next step and contact us for more information. We can help!