Whenever you think about buying a car, the first thing you need to do is work out how you will pay for it. If you plan to finance it, you can get a car loan from a bank or credit union, or a car dealer. Here are some tips that will help you choose the best place to apply for an auto loan.
Start with research: Speak to your bank. You can start the bank loan application process even if you haven’t chosen a car yet. Ask an expert to explain the loan application and all the application steps. They’ll also tell you what you can expect at the dealership. If you have excellent or even good credit, your auto loan application process will be quick, and the bank may even lock in a good interest rate for a certain amount of time while you check out cars.
If you’re an existing customer, the bank may even consider your relationship history and offer you some promotional rates or maybe even a discount. Managing the loan along with your other accounts could also be easier if you deal with the same bank. Remember to check all terms and conditions of the bank loan, including who you’re allowed to buy from and the kind of insurance you need to purchase.
You can also check out online lenders, but these often require you have a car picked out before offering complete details about the loan offer. They may also have a different set of rules and regulations. Whether you choose a bank, credit union, or online lender, it’s a good idea to get a preapproved offer before you step into any dealership.
Speak to the dealer: Once you’ve worked out your preapproved offer and chosen a car, see if the dealer can beat the offer you have on hand. You’re likely to get several offers from the lender your dealer works with. If you get a better offer, you could either accept it or ask your bank to improve upon their offer.
Compare all options and choose one with the best terms. Ensure that you can afford the monthly payment, and keep the loan term as short as possible.