Auto Loans

In North America and especially in the United States one of the may things that set us apart from the rest of the world is our absolute obsession with cars.  This is neither a good or a bad thing but it is an expensive thing and one that has sprung a variety of business around it.

I personally paid quite a bit for my car ($25,000) but honestly in my neighborhood my car isn't that great. We as a nation simply love cars and the better the car, the better we feel.

One of the most stable and profitable parts of the car industry is the existence of auto loans. Since cars cost a lot it is very normal, in fact it is the default way in which people purchase their cars. I didn't have 25k for my car, so I put down $5,000 and borrowed $20,000.

If you have found a car that you are interested in buying you will likely fall into the category of needing an auto loan.  Auto loans are known as collateralized loans due to the fact that if you fail to make your payments the lender will send a tow truck driver known as the repo man after you to repossess the vehicle that is not yours anymore.

As with any loan the first thing that you should do is to look at your credit history.  If there are mistakes or things that you can fix then you can save yourself thousands of dollars by checking it and fixing it before applying for an auto loan.

If you have a bad credit history then your auto loan will not only hard to get but will also be really expensive.  A typical auto loan should be about three points above the ten year Treasury yield.  If you are being quoted a rate much higher then that you should look elsewhere and see if you can get a better deal. 

If you have fixed your credit history then you are now ready to apply for the loan.  Look at your bank in addition to the car dealership as you can sometimes find a far better deal by looking around.  Even go online and look for auto loan lenders and see what they are charging.  As long as they are reputable then you can use them to get a lower rate and in turn save money on your auto loan. 

Once you get your auto loan you will usually be given a cashiers check from your bank to take to the dealer and pay for the vehicle.  Or, the bank will wire the funds to the dealer. At this point you can take you car home and start driving it.  Auto loans can be gotten for anything from brand new cars to used beaters that run well.  As long as the price is within regular boundaries the bank will be able to help you get your auto loan.

Generally speaking, students can fairly easily get loans for cars under $10,000. This is because they have consistent income because of their financial aid and student loans. However, these loans generally carry interest rates that are quite a bit higher than you would expect from a traditional loan. You might have to pay somewhere in the neighborhood of 10-12% and that's quite high for a loan on a car. However, if you don't have any other options you might want to go for a loan of this type.

If you're going to get an loan for a car, you should honestly head into a bank near you. I would recommend using either a large bank like Wells Fargo or Bank of America, or I would choose the biggest credit union in your area.

Car loans that have low rates can often save you a ton of money. However, you will need to have stellar credit to be able to qualify. You can often get these loans for as little as 6$ interest but you will have to have a credit score aobve 750 and a solid job to qualify.

You can generally qualify for an auto loan with no credit as long as you have a solid job and you don't have negative items on your credit report. If you have negative items you'll have to opt for a bad credit auto loan.

• Bad credit car loans
• Auto loans for people with bad credit
• Motorcycle loans (just like car loans)
• Bad credit refinance auto loans
• Poor credit auto loans
  

Loans for cars match up pretty well against other types of loans. For example, small business loans for people with bad credit won't be nearly as affordable as a car loan because there isn't any collateral backing the loan. Payday loans are terrible and carry like 300%+ interest. Refinance loans for bad credit can carry around 10% interest, even on a home.