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Best Car Loan Rates - Getting a Low Rate on Your Next Car Loan


Getting a New Car Loan

If you're in the market for a new or used car, you're likely scouring magazines, newspapers and websites, or picturing yourself in that hot new 2011 model on TV. Most consumers searching for a new auto are preoccupied comparing features, specifications and reliability reports but save the most important aspect of purchasing a car for the very last minute-how to pay for it. best loan rate


Doing Your Homework

Dealerships now are well aware of this tendency, and after picking out your vehicle, you're confronted with the sobering reality of financing that dream car. However, doing your homework before you sit down to crunch the numbers at the dealership is the difference between making a sound financial decision-getting the best car loan rates and being stuck with a car a few years down the road that's worth less than what you owe on it, while struggling to make the monthly payments. The key to getting the best car loan rates on a car loan is 1) proving that you can easily afford the payment and 2) showing the lender that you've honored your past financial obligations.

Proving Yourself

You need to show as much income as possible, including any source of income that is regular and likely to continue. The lender is especially interested in your debt-to-income ratio. They'd like to see that your total monthly obligations, including housing payments and all vehicle-related costs are well below half of your take-home pay-and ideally, closer to a third of your income.

Best Car Loan Rates

Here are some other tips for getting the best car loan rates: List all assets and collateral on your credit application, including the value of your home; Request a free copy of your credit report well in advance of applying for a loan to clear up any issues you can - research has shown errors on more than half of all credit reports examined!; Quite simply, your interest rate goes down as your credit score goes up; To reduce your monthly payment (and overall loan balance), finance as little as possible-the bigger the down payment, the less you owe; Avoid stretching out the loan term over five years or more-chances are, your car will depreciate significantly over time, but your monthly payments won't. best loan rate


Shop For the Car Loan First

Experts say that probably the best way to shop for a car is to search for the loan first, and then the car. Comparing rates and walking into a dealership with a prequalification gives you bargaining power when it's time to haggle over the dollars and cents-that's when the real rubber hits the road.