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Factors To Consider Before Applying For Auto Loans

When buying a car, you are often told to beware of the salesperson’s sweet tongue. However, you also need to beware of the auto loans lender or the dealer. Lenders will always try to trick you into getting financing from them thus you should be alert. Do not rush to borrow money before ascertaining vital aspects of the loan agreement. You should therefore:

a)  Inquire about the interest rate of the loan

The interest rate is usually the most crucial element of a loan agreement. You can find out from various dealers or lenders how much interest they charge and compare before settling on a lender whose rates are affordable and favorable to you.

b) Inquire about any possible auto loan penalties and fees

Be keen because scores of dealers and lenders usually have hidden charges and fees within the loan. You should therefore know of their existence and how much they cost. Also avoid any additional penalty fees that the lender may impose for early repayment of the auto loans.

c) Obtain a final approval on the finance package

In some cases, you may be tricked into believing that you have a deal only to be told the following day by the lender that the deal did not go through. Do not fall into this trap by ensuring you get an approval that the deal is done before you walk out.

d) Beware of additional credit insurance

Dealers like to generate a little extra revenue by advising you to purchase credit life and other credit disability policies from them. You may never know where the catch is hence you must first obtain all the relevant details for those extras before you buy them and also compare the policies with other dealers’.

These facts will definitely prove to be handy when you are securing auto loans, especially from dealers.

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