Tips on Getting the Best Car Loan Deals

auto loan

To have a successful automobile purchase, you need to negotiate the price, select the most suitable car and finance it using the most affordable source. Unless there are substantial savings that can help with cash payment, there is a need to borrow funds. A car loan enables you to purchase a car that you might not afford using cash. In this case, you can pay after some time as you make the monthly payments. With proper planning, you will increase your chances of getting a car and a loan that fits the budget. For fast and convenient car finance solutions, you can get Rapid Loans , and you will find a product tailored to your needs.
Below are some tips on how to get the best car loan:

Shop for the Best Car Loan

shop around for the best loanJust as you endeavored to get the best car deal at the lowest price, it is necessary to have a similar effort when dealing with loans. Do not settle with those options provided; you can shop around to compare the rates. There is a need to contact many local banks, direct lenders, and even microfinance institutions, know their rates and hidden charges. Make some notes on each and compare them.

Consider Prepayment Penalties

Since life is unpredictable, you might need to pay the loan quickly. Some lenders may charge a prepayment penalty if the loan is paid off before ending the loan term. To avoid the penalty, read the loan contract and ensure that you have some flexibility in accelerating payments, making extra payments, or clearing off the loan entirely without penalties.

Check Your Credit Status

check you credit reportYour history of borrowing funds from other financial institutions is necessary as it indicates whether you borrowed and the loans repaid on time. Reviewing credit reports before applying for an auto loan is helpful since it will determine whether you will be approved or not and the interest rate.

With a good score, you can generally get lower interest, meaning you can pay less for the vehicle. On the other hand, if the score is low, you can be prepared to get a high interest loan or even to have your application rejected. Also, if you have time, you can start to boost your score so by the time you want to take the loan , it will be better and help you get better terms.

Choose Short Repayment Periods

When loans have short terms, their interest rates become lower. However, the monthly payments are high. In most cases, when you need to finance a car, the salesperson negotiates based on the monthly payment, not the car’s overall price. The longer the time taken to repay the loan, the interest rate will be higher. Moreover, the banks charge high-interest rates on longer-period loans, increasing the cost of credit.


A Guide to Getting a Guarantor Loan


A guarantor loan is a special type of loan where the loan is secured by a guarantor. A guarantor is a person who is willing to take the risk of the settling the loan is the person given the loan does not pay. The guarantor must be a person with assets that can be sold to pay up the loan. The nature of such loan is a low-risk low return. They don’t attract a high-interest rate because they are not risky loans. Getting a guarantor loan is not an easy task. There are steps and procedures that one have to put into consideration before taking the loan. This is a guide to getting a guarantor loan.

persoal loan
Find a reputable guarantor

The first step is to find a reputable guarantor. The amount of loan to be given will be based on the ability of the client to pay and the reputation and wealth of the guarantor. The guarantor should be a reputable person in the community. In most cases, the guarantor should be a close friend or a family member. The guarantor should be willing to take up the risk. One should be able to convince the grantor that he has the ability and will to pay the loan. The best person to look out for is a person who has been a guarantor in other places. It should be noted that the guarantor has the freedom to withdraw his services at will. In case the person is declared bankrupt, he cannot continue serving for the loan.

Contact the best lending institution

The second step is deciding on the lending institution you are going to ask money from. The most common lending entity is a bank. There are other institutions like the Sacco, cooperative and international banks. If one is a member of a Sacco, loans from the institution are the best as they attract less interest. However one has to be an active member and saved for more than a year. Decide on where to borrow your money from. Approach the institution to understand the terms and condition of the loan. The loan repayment policy, fines, and penalties attached to late payments. Get to understand whether they will accept the guarantor of your choice. If they reject your choice, ask them of the reason and try to look for another person who can meet the requirement.

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Plan the repayment schedule

If you reach an agreement with the lending institution, before taking the loan, plan the repayment schedule. Try to see whether your income can service the loan. Consider if the loan has a grace period before maturity of the repayment period. Cut on unnecessary expenditure to raise more fund to repay the loan. If the loan was used for an income generating project, the proceeds from the project could be used to repay the loan. Interest on the loan is not taxed. One should claim the allowance from the tax officials. If all is set, apply and take up the loan.…