When you hear words like ‘loan’ or ‘financing’, you instantly conjecture them as complex terms. However, they are not as complicated as you think. Car loans are the easy way to acquire financial facility when you decide to buy your dream car.
What is a car loan?
Similar to credit facilities like personal loans, an auto loan is an option where you can get money to purchase an automobile. You, being a borrower, lend the amount from a bank or other financial institutions and repay the amount with interest.
If you are 18 years old or above, you are eligible to apply for an auto loan and a savings account is required to be opened. Generally, the auto loan is repaid in equated monthly installments (EMIs). Unlike a personal loan, an auto loan is a secured financing option.
- The fundamental part of a loan is its interest rate and principal. Now, the amount of principal is negotiable and is dependent on the market value of the vehicle.
- The interest rate is one of the important factors in car financing and you have to pay a certain percentage of interest on the principal amount.
- At the time of purchasing the automobile, you are required to pay a specific amount of money, which is known as down payment.
Many people may choose car lease instead of the auto loan option. However, the decision depends on your needs and preferences. Moreover, you may have to pay a higher amount for the vehicles that are over six years. Additionally, another risk factor for the auto loan option is that if you have a bad credit score, it can be difficult for you to get car loan approval.
Auto loan options
You should not delay purchasing your dream car when you have various auto loan options provided by well-known lenders. However, with several auto loan options, it becomes difficult to choose the right lender. However, you should always pay attention to the key factors including interest percentage rate, loan cost, and down payment.
Sofi
No matter whether people are buying high-end or cheap cars, the auto loan buy Sofi is considered to be one of the most popular ones. The lender offers low interest rates along with an attractive monthly automatic payment option which can be linked to your bank account. However, to be eligible for this auto loan option, a minimum credit score of 700 is required.
Lending Club
In this auto loan option, the APR starts from around 6.78% and you can get the advantage of the loan by entering your name, age, income, and address. You should keep in mind that you need to duly fill up all the required sections if you wish to get a reasonable interest rate.
Upstart Loans
This is one of the most popular auto loan options in the market due to its quick customer service. Whether you are eligible for the loan or not is decided within seconds and the minimum loan starts from an interest rate of around 4.67%. While calculating the APR for you, the lender considers your work experience and education.
Even if you have a bad credit score, you are not likely to face problems in getting the advantages of this loan. You can receive the funds in your bank account within three working days.
Apart from these three auto loan options, you can check the features of Lending Tree, Lend Up, Net credit, 100 Day Loans, and Prosper. For choosing the best auto loan option as per your needs, you can check the loan rates online or take assistance to maintain a high credit score from the professionals at banks.
