|By Graham Billings on December 6, 2010
A car is one of the most important things you own, so it is important to be sure that you are satisfied with everything about it. Along with this comes being satisfied with your payment for it. If you are not careful, you may get stuck with a car you like, but have no way to pay for it! There are several different aspects to car loans, but with a little preparation, it is easy to get a cheap car loan that will fit your budget.
Most importantly in any loan are the conditions of the payment and the interest rate. You want to be sure that you fully understand your loan – you should read the terms carefully to be sure that there is nothing tricky in it. Once you understand the terms, you should shop around to find the best interest rate you can. There are a few factors that affect your potential interest rate – your credit rating, the size of the loan, the term of the loan, and who is doing the lending.
To get the cheapest car loan, you probably want to borrow from a lending institution rather than a dealership. Plus, this way, you will already know the size of your budget when you actually go to the dealership to get the car. Secondly, if you minimize the size and duration of your loan, you will have cheaper payments. The easiest way to do this is by having a larger down payment on the car, whether through trading in, selling your old car and using that to finance the new one, or any other means. Finally, the better your credit rating is, the better car loan you will get, just like with any other loan.
It is important to take your time with car loans. If you spend the time to improve your credit rating, raise some money to pay a larger down payment on the car, or just take the extra time to read the terms of the loan, it will pay off in the end with a cheaper car loan.
See also: Getting a car loan with poor credit