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7 Tips on How to Score the Best Rates on Your Next Auto Loan

Published on November 17, 2012, by in Frugal.

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  1. Check out your options- One of the things that you have to do in order to get a good rate is to check out different options. The three common places to receive bad credit personal loans from include credit unions, banks, and the car dealer ships. Credit Unions will probably offer you the best rate if you are able to get a loan from them.
  2. Ask your personal bank for a loan- If you are someone who has a decent amount of money in the bank and do well at paying off your bills, ask your personal bank for the loan. They are more likely to offer you a better deal because they know your financial situation and how much you are bringing in each month.
  3. Put a decent down payment down- Another strategy when it comes to getting a great rate is to put down a decent amount of money. This shows that you have the financial capability to put down a significant amount of money at one time.
  4. Make sure that your credit score is correct- Your credit score will have a huge impact on the type of loan a bank or credit union will give you. It is a number that represents your ability to repay loans and other bills. When someone has a good credit score, they will get a lower interest rate. The bank or lender feels as though there good credit score is an indication that they will get their money back.

    In order to check your credit score, you should get a report from one of the three major credit bureaus. And if there are any credit cards that you didn’t take out or mistakes on your credit report, you can make a dispute. Despite the fact that correcting a mistake on your credit score can take some time, it is well worth it if you are going to take out loans.
  5. Consider a shorter loan term- In general, credit unions and banks will offer lower interest rates to people who have shorter loan terms. However, they also often require larger down payments and higher monthly premiums. You should consider all of these factors when you are trying to find an auto loan that will fit your life.
  6. Improve your credit rating- If you have some time to wait, you can improve your credit score. As previously mentioned, this number is key because it implies whether or not you will be able to pay back a loan. Some of the simple things that you can do in order to improve your credit score include paying your bills on time, stop overspending on your credit cards, and pay down the principle on your credit cards.
  7. Negotiate- Finally, you can try to negotiate with the lender to give you a better interest rate. People who are trying to obtain the loan from their personal bank might have the best luck. Because you are already a customer, they might be more likely to make a deal.

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