Get the best interest rates on car deals and loans

To get the best interest rate, check your credit, and shop and compare the loan offers, and then go to the dealer.

In order to get the best interest rates for car deals and loans, it is necessary to stall for the best lenders and get pre approved loans before you go to the dealership.

1. check your credit report

Your credit rating and your income will determine how much money you are eligible to borrow and how much interest rates are.

So don't check your credit report before applying for a car loan. If you have any wrong or incorrect information in your report, such as fraud, you may be denied loans or only provide very high interest rates.

2. apply for auto transactions and loans to multiple loan institutions

Once you check your credit, it's time to look at the car loan and lenders, which can be divided into:

A large national bank, such as the Bank of America or the first capital bank.

Local community bank or credit union.

An online lending institution that provides only auto loans.

Dealer financing, or "exclusive" creditors.

You will want to compare the offer to the previous three types of lenders first, even if you plan to take dealer financing to end. As a customer, your own bank or credit union may give you a preferential interest rate, so check it. You can also compare auto lending institutions online.

If you want to buy a car from a private party, not from a dealer or broker, make sure that every lender you think about allows it. There are some restrictions on where you can buy a car.

3. obtain pre approved car deals and loans

Once you narrow your search to several lending institutions, it's time to ask for interest rate quotes and compare offers. Getting lenders to compete for your business can give you the best interest rates, because everyone has different factors to weigh in your credit report. This means that the interest rates on auto loans may vary greatly.

Applying to lenders can be confusing because some companies provide pre qualification, which requires only "soft" credit pull, while others provide pre qualification, requiring "hard" credit pull, and temporarily reducing your credit rating. Prequalification will give you an estimate of the interest rate you may expect, and the prequalification will give you a more specific rate quote. In this way, pre approval protects you from the effect of interest rate plus, otherwise you may be a victim of the dealer.

4. use loan to set budget

Your pre approved offer will indicate the maximum amount you can borrow, but that's not the price of the car you can buy. You will need an extra 10% to pay taxes and fees. Use the car loan calculator to design your loan. Put your down payment, your existing vehicle discount value and loan terms, find the right monthly payment, and meet your budget.

5. find your car

Now that you've got the opportunity to finance and calculate the maximum cost of your car, it's time to make an interesting part: choose your new car.

To avoid disappointment, once you are determined to buy a car, be sure to check the terms of the loan:

Exclude brands. Some lenders exclude certain automakers or types of vehicles (such as electric vehicles) from financing.

Dealer needs. Some lenders, such as capital one, require you to shop through a specific dealer network.

If you plan to buy from a private seller, how the lender will send the funds.

time limit. Most lenders give you 30 days to use the loan. If you don't have time, call the lender to extend your offer.

6. check the loan provided by the dealer

Once you have a test drive and you find a car that meets your needs, you may still have the opportunity to get better interest rates from your dealership.

Carmakers have established their own banks, which buy cars through dealers, who sometimes offer rates below the market. Once the financial manager finds that you have been pre approved for a fixed price, he may try to break that price to get your business. It's no harm to apply to see how low your interest rate can be.

7. select and determine your loan

If the dealer exceeds your pre approval rate (as with other terms), congratulations - you can rest assured that you have a great financing rate. You can accept the loan without considering other conditions.

8. pay on time

After your car loan is locked in, you can be ready to drive to see the sunset. But don't forget to pay back your car loan. The history of repayment on time is one of the most favorable factors in your credit report, so you may see your score rise after you repay the loan for six months or more.

You may receive a login to a web portal where you can manage your personal information and make payments or register for automatic payments. If you choose to transfer automatically, you can even get a little discount on car deals and loans rates.