Great Tips to Choose a Car Loan

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Great Tips to Choose a Car Loan
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• Every car is much more than a four-wheeled
  automobile. It's owner's glory, passion and a
  source of great admiration. Yes, a car is not
  just a means of transportation. It's America's
  pride and its ultimate ecstasy.
• When one sets out to buy a car, several things
  are to be considered. Most people have an idea of
  what car to buy. But, there is confusion and
  dilemma when the topic of car loans comes up.
  This article will give you a detailed
  understanding of the many auto financing options
  available with you.

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Money before Everything Else

• It is so true. You cannot venture out for buying
  a car when you have no idea about your finances.
  If you think car loan are going to do everything
  for you, think again. You will have to manage
  down payment and also ensure regular payments.
  Car loans are just to provide ease in buying.
• Finding that perfect car loan requires you to
  carefully put together all your income and
  expenses and then preparing your budget. You will
  have to consider your savings and choose
  something that will not give you financial
  trouble.

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A Plenitude of Options

• Everything depends on getting the information
  that suits your situation. So, don't settle for
  the first financing option you get. Don't just
  stroll into your local dealer's office or your
  neighborhood bank. You must first do a complete
  research and analyze your condition and needs.
• To help you make a good choice, here's all the
  information about car loan types. Check out all
  the advantages and disadvantages of every option.
  It will help you make a wise decision.

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Dealership Financing

• A car loan with a car from the same yard- seems
  too alluring to ignore!
• Most Americans choose dealership financing
  because it offers a one-stop solution. Dealers
  offer loans for new as well as used cars. You
  must know that most dealers are link between you
  and the lender. Such dealers won't themselves
  lend you money, instead will sell you loan
  application to lenders.
• This option is convenient but make sure that
  dealer is not charging a high interest rate. For
  that, you must research and be wary of any red
  flags. Also, don't opt for any add-on if you
  don't feel their need. It will help you reduce
  the cost.

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Personal Loans

• Banks and financial institutions offer loans for
  almost any purpose like buying a personal item or
  even a holiday trip. You can avail personal loans
  for buying your dream car. Now, this type of
  financing is useful when you need a loan for a
  smaller amount like 15,000.

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Car Leasing

• This is another option for you. When you lease a
  car, you only pay for the cost of using it. The
  biggest advantage with leasing is that your
  monthly payments will be significantly lower than
  the usual car loan payments.
• You don't have to worry about down payment and
  the lease agreement will get over in two-three
  years. You always have the option of buying the
  car at the end of lease agreement.
• When you go for lease financing, don't forget to
  negotiate the car price. Most buyers think that
  one must pay the full sticker price which is
  wrong.

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Equity Loans

• If you are one of those few lucky people who have
  sizable assets like a house, you can go for
  equity loans. You can avail a home equity loan by
  using your home as collateral.
• Although the rates are lower and the interest is
  tax-deductible, there is the risk of losing your
  home.

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Credit Cards

• Though it may sound unusual, but there are many
  who opt for this method. A credit card can help
  you buy a car for a smaller amount like 10,000.
  You must have a low-interest credit card. With
  large competition, getting a low-cost card won't
  be a trouble for you.
• The only thing is that you will have to restrict
  other purchases on your card. Also, most credit
  card companies charge a 3 processing fees. If
  you are sure of paying this charge to the dealer,
  go for it.

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Car Loans

• This is as popular as dealership financing, if
  not more. In this type of loan, your car is used
  as collateral against monthly payments.
• It is very good option if you make regular
  payments. The only thing that you need to keep in
  mind is that you won't be able to finance a car
  older than six/seven years.

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Online Car Loans

• This type is just the blend of car loans and the
  internet. With technological advancements, you
  can get everything on the net and car loans are
  no different. Online lending companies have a
  large network of lenders and dealers who bid for
  your application. All you need to do is fill a
  simple online application form.
• As there is a wide network, getting a loan is
  relatively easy. Also, the convenience of
  availing a loan without moving out of the house
  is very tempting.
• You should only be concerned about the company's
  reliability. You can check the website's safety
  by going through their security certificate.
  Don't go for a company that charges for loan
  quotes because there are many reputable sites
  that offer free quotes.

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How To Choose That Perfect Car Loan?

• Just go over with a fine-tooth comb.
• Once you decide on the type of car loan and
  apply, it's time to scrutinize the loan quotes.
  Loan payments are important but it shouldn't be
  the soul of your decision. There are several
  factors which are equally important. Before you
  rush to your decision, take a look at these
  variables.

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Loan Term

• Your loan term will have a huge impact on your
  loan. A longer loan term will mean that your
  monthly payments are smaller, but you may
  eventually be paying more interest rate. It is
  advisable that your term should be in accordance
  with the useful life of the car. Your loan should
  get over before the life of car to avoid the risk
  of an upside-down loan.

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Interest Rates

• Interest depends on factors like the loan amount,
  loan term, credit score, financial condition,
  etc. One important tip to lower loan rates is by
  making a substantial down payment. This will
  reduce your loan amount and also instill a sense
  of faith in the lender.

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APR

• The Annual Percentage Ratio will tell you about
  the total cost of the loan including all fees and
  charges. Most borrowers consider just monthly
  payments. But, it is impossible to compare
  different loan quotes with different loan terms.
  When you compare two loan quotes with the help of
  APR, you are taking into consideration all the
  variables.

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Clauses

• You must compare loan quotes on the basis of the
  clauses in the loan agreements. Few lenders
  prohibit you from refinancing your car loan for
  the first few months. Some lenders also offer
  zero percent financing for the first few months
  only and then charge a floating interest rate.
  So, check for such clauses which may cause
  problem in the future.

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Charges And Penalties

• Check the loan contract for origination fees,
  annual charges, prepayment penalty and penalty
  for missing out on a payment. Choose a lender
  that has lesser fees and doesn't charge you for
  making early re-payment. The latter will be
  useful if you decide to refinance your loan.

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Payments

• It is important to know whether you are supposed
  to make payments weekly or monthly. If you can
  afford monthly payment, don't consider any other
  option. This is so because it will give you the
  choice of making regular payments without any
  undue financial restraints.
• Once you compare quotes on these factors, you
  will definitely get a winner. Choosing your car
  loan by this method may take time but what matter
  is the ease in making payments. Every factor is
  important in making your life simpler and your
  car buying experience more pleasurable. So,
  memorize these important tips.

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• Owing a car is a dream for many, but one who
  takes a wise decision can fulfill it in true
  sense. Car loans won't be a trouble if you
  consider your needs and financial condition.
  Remember a good decision comes with a thorough
  research process.
• All the best for choosing the best!

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