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How to Get a Used Auto Loan [Used Auto Loan]
September 15, 2009, 1:19 pm
There are a number of online sites as well lenders that are willing to give you used auto loans. You can also get the auto loans from your family and friends. Understand all aspects of the loan before you take the auto loan. Before accepting the used auto loans its important to remember a few things especially when taking the used cars from the dealerships.
These precautions should be taken before you sign on the dotted line for taking the auto loans
- Check that the vehicle you have chosen is free from any existing finance. Else you would be paying a really big monthly installment.
- Check that the vehicle is relatively new (this means that the age of the vehicle is less than 5 years). Look at insurance and the registration papers of the vehicle to know this.
- Ensure that the vehicle has run less than 60,000 miles. If the age of the vehicle is older than 5 years or it has run more than 60,000 miles, it's likely to make you bleed for the repairs and the maintenance.
- Check if the vehicle has had an accident, or has been stolen or has been listed.
- Get the condition of the vehicle checked from an independent mechanic. If the dealership doesn't allow an independent mechanic to check the vehicle, you have an option of going to another dealership.
- Confirm the price of the trade off before you apply for the used auto loan.
- You can also get used auto loans from the credit institutions
Apart from auto dealerships, you can also approach banks and credit institutions for getting the auto loans. Even if you have bad credit, you can still get a
bad credit auto loan. Many credit unions and banks will give you auto loans for buying the vehicles. The factors that affect the rate of interest for the auto loan are credit score, amount of down payment, amount of loan and tenure of the loan. Sometimes you can also prepay the loans. But check before if there are any pre-payment penalties for the auto loan.
Majority of banks, credit institutions and credit unions use the FICO score. A FICO score of less than 600 is considered to be bad credit score, while a FICO score of more than 720 is considered to be a good credit score for taking auto loans and other loans. A credit score of 850 is considered to be an excellent credit score. Those that have bad credit scores will have higher interest rates on their auto loans. Those that have bad credit can be charged 13-17% rate of interest.
When you make monthly payment for the auto loan on time, your credit score will improve. This will help you to get
cheaper auto loans and other loans in the future.
Getting auto loans for private purchaseThere are specialized lenders that provide auto loans for a private purchase. Many online sites that cater to bad credit auto loans may not give you auto loans for private purchase.
Keep the documentation ready when applying for auto loans. Your credit reports, residence proof, salary and employment proof are the necessary documentation when applying for
used auto loans.
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