Saving money on a car loan

Buying a car can be a great thing. That feeling of self-satisfaction, fulfillment and accomplishment when you get in your new set of wheels, grabbing the steering wheel and roaming off on the open road. But right before you step on the pedal, alarm starts ringing, you wake up and reality hits you like a moving truck. Being that car purchase is one of the largest life expenses, you cannot let yourself be hasty. There are various ways you can save up money on your car credit. Banks, as well as other financial institutions, are practically fighting over to give you money. This way more and more car loans are approved. This provides the possibility for a great number of people to buy themselves a new set of wheels. But don’t be fooled. Many banks are offering instant cash credits, for which interest rates are higher than for the credits that are 
meant for buying car (a car loan).

 
Have you recently noticed people around you in new cars? Have you, at some point, listened to their discussion on the purchase? That is a good place to start. Any piece of information you gather can only help you with your decisions. If you cannot gather enough money in such a short notice for a car purchase, you should consider borrowing it. There are assertive guidelines which will help you save money on your loan. Persistence, planning and price comparison are needed if you are aiming for the best deals.

Do your credit check!

You should run your credit check before trying to swim in the seas of administrative paperwork. This will give you a glimpse of your credit capabilities. If it turns out right, you will have no problem in negotiating better interest rates. However, if your budget is burdened with various loans, car loan, bike or boat loan, house loan, stacks of unpaid bills or any other credit, then be sure that the lender will set his interest rates high. Primary object is to save money, so you should always keep that in mind.

Pay your bills on time!

Make sure you pay your bills on time, if you want to avoid negative points in your credit report. It is of great importance that you repay all your debts in time. If you do so for several months (three to six months will be advisable), it will surely prove to be a positive thing on your credit score. Some unused savings on your account or on several accounts will greatly improve your credit score. Keep in mind that credit score dictates the interest rate on your loan.

Keep your loan realistic!

There are more ways to save your money on car loans. Having a sizable down payment is one of them. The lower the loan is, the lower the interest rates will be. It’s good to have your feet on the ground. Borrow the amount you actually NEED for buying a car so your car loan may be preapproved with low interest rate. This way you are avoiding surprises at the end of the month. Excess of money you get increases the monthly payment as well as the interest rate.

Check more financial institutions and do a comparison!

There are numerous financial institutions which you can lend money from, such as banks, credit unions etc. But these days you can find great deals and low interest rates with the online lenders. Take your time to check as many lending options as you can and compare their offers. Keep that in mind and you will find the best deals which can save you money. Patience is your friend here.

Be wary of the car dealers!

Almost every car dealership is offering to arrange a car loan for you, but this is the last thing you should consider. Not that many car dealers can offer you a good arrangement. Nevertheless some of them are followed by a good reputation, customer satisfaction and words of grace. If you chose to buy a car at the car dealership, make sure you bypass the add-ons, such as car and life insurance, disability insurance and such as well as  the car add-ons such as car stereo, window tinting, alarm installment, leather seats, pin-stripes. These things can increase your car loan and with it, your monthly payment and interest rate.

If it is in your best interest to save money while buying a car, you should keep these tips in mind. There is no un-useful information. And remember…patience, planning and price comparison, these three are your friend.

Loans for vehicles

Everybody who has a job and a family should also have a means of transportation. Of course, one can always use the public transport of his city, but having a car or a motor bike at your disposal whenever you want is always a preferable option. This, however, has its common drawback, and that is finance. Not many are able to just take out the cash and buy a vehicle on the spot, especially if they have an average monthly income and that is why people usually loan the money in order to purchase a vehicle. Loaning the money for a purchase of any sort carries that well known burden of “Interest debt”. However, in return, you are not paying for your item right away; actually you pay a smaller amount of money weekly or monthly depending on your income. There are specified car loans for this purposes like for example “Short Term Auto Loans” and “Long Term Auto Loans”.  

Short Term Auto Loans

These loans designed for the purchase of a new or used car and have payment terms of 12 up to 36 months and, as its name states; it has a shorter amount of time with lower interest rate for paying for your vehicle and getting that problem off your back. On the other hand you should not expect these monthly payments to be small. In other words, a customer with a bad credit rating may not find this option preferable to him or her since in that case the interest rate can be higher in order for them to have this kind of loan approved by the lender. A person with a good credit scores may opt for this loan, since his interest rate will be lower.

Long Term Auto Loans

These loans have payment terms longer than 36 months up to about 84 months and individual monthly payments are significantly smaller. The drawback of this option is that interest rate increases immensely and one will end up paying for a car a lot more than its original price.

There are other options to have a vehicle at your disposal for example “leasing” and this option will lend a weaker blow to financial situation. How does this work actually- what you need to do is find a financial institution that will lend you money for the car purchase and, after that, you repay the money that you have borrowed from that institution in monthly payments which are not as high as the ones that you would pay in the case of Auto Loans. The main difference in this case is that you are not the owner of the vehicle; instead you are a person who rents it from the lender since the financial institution which paid for it is the owner. Despite the ownership twist, this option has a lot of advantages:

1.       1. You get to use the vehicle during its best years.
2.       2. You do not have to worry about the increase when it comes to the interest rate.
3.     3. There is an option in which case you can pay more money in advance in order to decrease monthly installments.
4.       4. There are no additional payments after the agreement with financial institution has been reached.
5.       5. If you are satisfied with your vehicle there is an option of prolonged leasing period.
6.  

This can be a very good deal if one is not ready or does not have a luxury of affording a great cut-back in his or her budget to provide his or her family with a means of transportation.
 

There is another interesting way of buying a car or a motorbike it is called Residual Value or Balloon payment. It allows you to pay back the money that you have loaned for the vehicle in monthly payments that can be different and the amount of money that you pay monthly is all up to you under the condition that the amount of money that you promised to pay back over designated time remains the same. So if you borrow, for example, $40.000 and have 25% interest your total debt would be $50000. If your contract states that you need to repay this money in 5 years your monthly or weekly payments depend on you as long as you pay the full amount in 5 years time. This agreement reacquires some special conditions so it is not possible for everyone to make this kind of payment.

What You Should Consider Before Applying for a Motorbike Loan

There are various ways to finance your motorbike loan. You can either do that through the dealership or any financial institution such as banks, credit unions, etc.

Bank motorbike loans are often better than the dealership. However, this may not always be the case. If you are looking for the most convenient choice, you should let the dealer organize the motorbike loan for you. This is the easiest way, if you are already at the motorbike lot, purchasing it. On the other hand, if you are looking for a better deal you shouldn’t consider this.

Getting a motorbike loan resembles the process of getting a car loan. Only thing that differs here is that not many banks will approve it, since this is a high risk loan. Motorbikes often succumb to thefts and crashes. Yet people often chose motorbikes over cars because they can travel the same distances faster for significantly less gas. Even though motorbike loans are more available now, some banks still refer to it as a specialty loan.

First thing you need to do is to ask for your credit report. Never apply for any loan without checking it. This is by far the most important document for this action. According to the passed Fair Credit Reporting Act, many creditors are obligated to provide your credit report to you. This service is free once a year. On top of that report you will find your credit score which is presented with a number from 1 to 1 000. If you have your credit score over 695, you can be sure that you will have no problems in obtaining a motorbike loan. However, if your score is under 695, you should consider either improving it or qualifying for a personal loan. Personal loans are an option, but their interest rates are higher, thus they are not specialized loans.

Before applying for a loan you should consider what motorbike you wish to buy, as well as its price. Take in consideration any add-ons you are willing to purchase, such as item enhancements, motorbike wear and gear and/or tools. This is an example of the most common mistake:

• “Can you tell me how much money would you need us to lend you for a motorbike you decided to buy?”
• “I don’t know. I haven’t thought of it yet. Probably around 10 000$.”

DO NOT EVER TRY TO GET A MOTORBIKE LOAN WITHOUT KNOWING EXACTLY HOW MUCH MONEY YOU ACTUALLY NEED! If you do this you won’t be stuck with excess money which, due to interest rate, increases your monthly payment.

Do not go shopping for a motorbike at the dealership before consulting your bank or a financial institution in which you are applying for a loan. There is a good reason why people have aversion to dealerships. Their financial services offer “good rates” and “special offers and promotions”. Some of these promotion researches show that the interest rates are great… for the first 12 months. After that they go way up and you might find you overpaid greatly. It is a salesman gimmick they are using, hoping you will be overexcited and buy a motorbike without thinking long term. When asking about your motorbike loan in your financial institution you should keep these questions in mind:

• “Is the interest rate fixed or does it vary over time?”
• “Will the interest rate change in time for ANY reason?
• “Do you have to pay any administrative fees and taxes?”
• “What are their prices?”
• “What are the penalties for skipping payments; let us say…… a month or two?”

Nowadays online banking became very popular, so the financial institutions are improving it every day. You can skip some administrative taxes and fees by applying for a motorbike loan online. Terms of repayment for motorbike loans purchased online vary from 12-36 months. There are some extreme cases where the end term can reach up to 72 months. Yet again you should keep in mind the history and status of your lender.

• “Do they have good customer service?”
• “Will they be able to give you good advice and instruction in times of need for it?”
• “Do you have a possibility of choice on what date will your repayments will begin and end?”
• “Can they automatically deduct the payments from your account, making the whole repaying process simple?”
• “Will you have a possibility of an online check?”

Getting a motorbike loan does not necessarily always have to be a tense process. It can actually be a benefit for you in a lot of ways.  The research will always do you good, plus you are upgrading your credit report. And in the end, you will have your dream bike roaming and traveling down the open road… am I right?