How To Compare Car Loans

Getting a car loan is something that many of us have to do at some point, but few people seem to enjoy the process. Along with paying taxes and buying a house, car loans are something we don’t look forward to, and it’s not unknown for sleepless nights to be had as we stress ourselves over the best deal we can get. This article will help you understand how to compare car loans so that you can choose the best option for you.

Car loan checklist

Use this car loan checklist to compare different loans that are available to you:

Get a Quote from A Bank or Credit Union

Most times, you will find that banks and credit unions will offer you better rates than you would get through the dealership. However, banks usually require excellent credit scores – that said, if you can get a loan offer from a bank, you’ll be in a better negotiating position and save yourself some money.

Check out Loan Offers from Licensed Dealers

Large brands like Ford, Honda, and Toyota have their own financial arm and will offer loans to people who purchase a car from them, so if you don’t mind shopping for a car from a specific car manufacturer, it’s worth considering this option.

Know the Cost of The Loan

When comparing car loans, many people only look at the monthly payment and make a decision based on that figure. However, this can be quite deceiving since the lender or dealership may have rolled in a number of fees into the loan and extended your loan term, which may have caused your monthly payment to seem more affordable. So, when comparing loans, make sure to check the total cost of the loan, including the interest rate and other charges.

Inquire About Early Payment Penalties

If your financial situation changes, you may want to repay your loan in full before the end of the loan repayment term. But if you do this without being aware of the fine print, you may be hit with additional fees that could make it not worth doing so. It’s a good idea to inquire about early repayment charges before you finalize your loan.