5 Things To Know About Car Loans Before Applying

1. Blog1: Houseofcarslethbridge.com 5 Things To Know About Car Loans Before Applying Buying a vehicle on sale is probably one of the most significant investments someone can make. The majority of people can't merely pay it with cash upfront, which is why it's common for them to apply for a car loan. If you are considering purchasing a used car or a newer one, it is vital to acquire a car loan, which is why we want to share with you five essential things that you need to know about car loans before finally applying for one. Know your credit score Whether you're going through a bank, an auto loan dealer or the dealership itself, they will want to know your credit score to assess your creditworthiness. Every lender will have different criteria, so it is worth looking in advance to accept the lenders' minimum score. Compare interest rates Every lender will add an interest rate to your loan, but not every lender will offer the same percentage. It will vary depending on the lender and many other factors, such as the car model, employment details, repayment capacity, credit score, and many other things. An interest rate that is way over the market average is something to steer clear from.

2. Blog1: Houseofcarslethbridge.com Consider the length of the loan. A loan is a long-term investment that you will have to pay no matter what, and while offers that have low monthly payments can be enticing, it is to be cautious of. This typically involves higher interest rates. Be sure to plan ahead to avoid this affecting your budget and plans. Compare LTV ratio LTV (Loan to Value) ratio is the proportion of your car's purchase price that will be financed by the lender you choose in the end. The rest of it will be paid by your down payment money. Make sure to compare the LTV ratio offered by various lenders. However, we recommend trying to make a higher down payment (if it is well within your means) that will translate to lower interest costs. Finance what you can afford Remember to make sure that you can afford the monthly payments. While you shouldn't let low monthly payments fuel your loan decision, choosing a loan with higher costs than you can realistically afford is even worse, since if you fail to pay them, not only will your car be repossessed, but your credit score will suffer as well. Be sure also to consider all other costs that come with owning a car (insurance, gas, etc.) We hope these few tips can help you with your plans for owning a vehicle. If you are interested in purchasing a used car and live in the Lethbridge area, you can contact us to learn about our available vehicles and exceptional deals!