Getting good car financing is all about knowing what is good in your current situation and what is not. Of course saving money is on everyone’s mind but when your credit score is not good you can’t expect a 5% car financing interest rate and this is where knowing about your credit report comes in. Before you do anything your job is to get a copy of your credit report and study it paying special attention to your FICO score. You also need to look for errors in your report and if you spot any it should be reported immediately to the credit bureau.
The Online Option for Car Financing
When you are seeking car financing it is always good to know that you can get car financing from online loan companies. When you apply online for car financing your application is matched against a number of lenders. Now each lender will compete against the other in order to provide you with the best possible interest rate. There are also many online lenders that specialize in giving people bad credit car financing. This is a relief for those who feel turned down by every other lender because of their poor credit scores. However the trick to getting a good interest rate is to shop around before you settle upon a specific online lender. People with bad credit are charged a higher interest rate depending on how bad their credit is. If you are a person with bad credit you can expect an interest rate of something around 10 -20%. Some lenders will also require that you make a large down payment of around 20% or 50%.
The Car Dealer Option
Visiting a car dealer and then driving off with the car of your dreams is a great idea if you can afford the extremely high interest rate. Car dealers might have various offers for you some might even hand you over a brand new car within a few hours after walking into a dealership but is that something you really want. Consider that even if you have good credit you are going to be paying somewhere around 10% in terms of interest rates. Add to that various fees and processing charges that some dealerships might charge. This however might be a good option if other lenders are offering you the same interest rate because the advantage here is you are driving out with a new car.