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For Your Next Used Car Lot Visit: Consider a Car Loan

Consider a Car Loan For Used Cars in Birmingham

If you're planning your next trip to the used car lot, you may want to consider the option of a car loan. Keep reading more about used cars in Birmingham.

 

 

Are you in the market for used cars in Birmingham?

Now may be the right time to start researching auto loans.  Securing an auto loan will place you among the record 107 million Americans that have utilized financing to buy their dream car.

Here, we are going to help you prep for an auto loan. Specifically, you will learn how to budget and where to apply.

After you read this article, you will be totally ready to shop for used cars in Birmingham!

Lay the Groundwork for Auto Loan Shopping

First things first.  You need to have a firm grasp of your personal finances.  

This means researching your credit score and figuring out what monthly payment you can fit into your budget.

Start by downloading a free copy of your credit report from the U.S. government’s website www.annualcreditreport.com.  There are three different credit reporting agencies and each one produces its own report.

The auto lender will be reviewing at least one of those reports and you should ensure they are accurate. You should also be aware of any negative citations.

Equally important is your credit score. There are a number of different websites that allow you to obtain your credit score free of charge. 

The interest rate that you receive will directly correlate to your credit score. The better your credit score, the better the interest rate. 

Moving forward with your preparation, the interest rate that the lender sets for you will partially drive the monthly payment.  Search for an online auto loan calculator to get an idea of how much the monthly payment will be.

The other drivers of the monthly payment will be the term of the loan and the sales price of the vehicle.

What Are the Next Steps in the Auto Loan Process?

After you know your credit score and have a price target in mind, you should start shopping around for the most competitive auto loan.

Reach out to local banks and credit unions to find the lowest interest rate.  Once the best possible deal can be had, it is time to apply for a preapproval.

A preapproval letter from the bank tells the car dealership you are a serious buyer and ready to cut a deal.

Here are a couple of important things to note at this point in the process.

First, a preapproval is not a formal commitment and you can always switch to the car dealership’s lender if better terms are on the table.

Second, a fair or poor credit score will not preclude you from getting a loan.  Many lenders offer programs for those with bad credit.

A less than ideal credit score should not stop you from shopping for the best possible deal out there.

You Are Ready to Shop for Used Cars in Birmingham

Take your loan preapproval letter to the car dealership and start the buying process. This is going to make the process easier and more efficient for both parties.

If you have any questions about used cars or auto financing, do not hesitate to contact us and let one of our experienced sales specialists help you.