Car Loans: Hints and Helpful Tips
There are many financial competitors in the market who provide loans, so getting a car loan is not very difficult. However, if you want to get a car loan or an auto loan at a reasonable rate of interest, then you should have an adequate credit score with a good credit history. It is a dream of many of us to buy a brand new car with all the latest car gadgets. Opt for a personal car loan can help fulfill the dream.
Requirements for a Car Loan
The documents that a bank or a financial institution would ask for are :
- Income proof.
- Permanent and temporary residential address.
- Xerox copies of tax return papers.
- Bank statement of past three months.
If you have a bad credit, apply for a bad credit car loan. The financial institution would require the same set of documents but you would have to pay a huge down payment and a high rate of premium. The time duration to repay the bad credit auto loans varies from one to four years.
Before finalizing the deal with a bank, check out the rate of interest, terms and conditions, and other schemes offered by banks. There are basically two types of car loans - short-term loans and long-term loans. In a short-term loan, you would have to pay a lower rate of interest but the monthly installments would be a huge amount. Whereas, if you apply for a long-term car loan, you get a longer time duration (3 to 5 years) for repaying the loan and the monthly installments will certainly be small. However, you would end up paying more interest than short-term loans. It is up to you to decide which type of loan is favorable for you depending on your current financial status.
If you have a bad credit score, you should take necessary measures to repair the credit before you apply for a car loan. If you are paying a high annual percentage rate (APR) on your car loan, then it is always better to consider going for a refinancing your car. In this way, you can get a better a rate of interest.
A refinance loan application form should contain the details similar to your current loan. Remember to fill in your name and address as you have given in the current loan application form. Your application can get rejected even if there is a slightest variation in the refinance application because your current loan is tracked with regards to the details provided in the refinancing application form.
Whether you have a good credit rating or not, you should first approach your local Credit Union. Check out the rate of interest with them. If it is favorable, consider becoming the member of the local Credit Union. The APR would not only be less you would also get a small discount because you are one of the members of the credit union.
It is advisable to check out the rate of interest of various financial institutions online or through friends or relatives before zeroing in one of them.
