For those who are shopping around for a car loan, finding the right auto loan can seem like an insurmountable task. Although many sites provide suggestions of approval rates, they don’t always point out what the best options actually are. That’s where this article comes in! It offers helpful hints on finding the most appropriate auto loan before you apply
What is a Good Auto Loan Rate?
A good auto loan rate means that a person is leasing a quality car without getting into any extra costs that might be unnecessary.
When to take out an auto loan
Many people are looking to purchase a car in the coming months and want to know what the latest auto loan rates are. While rates vary by lender, currently average rates are around 1.6% APR and average interest 12% APR. If you’re going to buy a car, it might be wise for you to think about taking out an auto loan with a company like CarMax or CarsDirect.
Tips for getting the best rates
It is important to not only consider the monthly payment of your loan, but also how long it lasts. It is best if you can find a loan that lasts at least 20 years because during that duration the interest rates will most likely stay low. Other factors that might be relevant are how long it requires for you to pay for the car and how much of your total loan payment goes towards interest rather than principal or down payments.
A good auto loan rate doesn’t depend on how attractive your credit score is; instead, it depends on how large your down payment is. The smaller the down payment, the lower the interest rate you should expect to pay. For example, a personal loan for $15,000 might cost you 6% interest with a full-priced maturity of five years. However, an auto loan for the same $15,000 would require a higher down payment and result in a lower interest rate of 4%.