Guide to Finding Cheap Auto Loans Online

Finding cheap auto loans is easiest for good credit borrowers. If you have a high income, low debt and good credit score, your auto loan should be fairly inexpensive anywhere you source it. For medium to low credit borrowers, however, there are fewer options. Cheap will be a relative term. Nonetheless, you can find good deals comparatively on your loans through online quotes.

Start with Traditional Lenders

The place to start looking online is still with traditional lenders. Your bank will have a website for you to review regarding possible automobile and personal loan options. Here, you can get a reasonably fast quote and see whether you would be approved within a matter of days. While traditional lenders offer security and good terms on loans, they unfortunately charge higher rates to most borrowers. You may also find the loan options are rather short and leave you with high monthly payments. This loan quote will be a good starting point to use when evaluating your other loan options. 

Check Dealer Quotes

The next place to look for quotes is directly with the dealer. You will usually find the interest rates and incentives offered by dealers make these financing options lower than the options provided with your bank. Dealers have an additional incentive to offer you a discount: they want to make the sale. Even low credit borrowers can usually get approved. With dealers, though, you should be aware of the verbiage they use and the terms they provide. For example, they may show that there is only a .2% increase in a loan that is 2 years longer, but this can actually mean a 3% APY overall. Instead of just looking at the surface terms of the quote, be sure to review how often interest compounds to find the total cost of the loan over time.

Seek Alternative Lenders

Good credit borrowers will likely find better deals on loans through banks and dealers. However, bad credit borrowers may find the best options for them through alternative sources. Visiting lender websites online, you may see some that even advertise for low credit applicants or offer pre-approved loans. You should exercise caution when entering any personal information into these websites. Do not provide security information until you are confident you are working with a credible lender. You may be able to get easy quotes by simply entering round figures into an estimator, and this is a good place to start.

Determine the Best Value

With an alternative online lender, the first quote is usually the best quote. Dealers are typically limited in their negotiation abilities by the car manufacturers that back them. Banks, on the other hand, can negotiate. If your bank quote is within range of your other quotes, then it may be worth a call to speak with a representative to see if you can get a slightly better deal. If the bank quote is far higher than your other quotes, though, it is a better use of your time to simply pursue one of the other options you have found.

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