Finding a car loan can seem like a daunting task to many potential car buyers. With a wide variety of options to choose from and factors to take into consideration, car loan shopping can be overwhelming.
However, finding financing options doesn’t have to be so scary. The Federal Trade Commission (FTC) advises consumers to shop around for their financing, and here is some information that may help you find the best car loan for you.
Hopefully, the following tips can help narrow down your car loan options and give you a positive shopping experience.*
Auto loan options
- Getting your financing through a dealer: This is an agreement between you and your dealer to buy a vehicle and pay for it according to the terms of the loan over a set period of time. The dealership may keep the contract or sell it on to a financial institution to service that account.
- Shop around: The FTC recommends considering financing from several dealers, as well as other sources, to find what suits your needs. Visiting multiple dealerships may help provide a variety of auto loan options.
- Convenience: You can drive off the lot with your new car, and a contract entailing your payment plan.
Banks, finance companies and credit unions
- Getting a loan directly from a bank, finance company, or credit union: This is an agreement directly between you and a lender. Approved applicants can use the loan to shop for a vehicle at a dealership, or buy from a private seller, according to the terms of the loan.
- Shop around: This option may also take some shopping around to find the right lender for you. You have the opportunity to talk to several lenders and make comparisons.
- Convenience: Direct lenders may offer qualified applicants the chance to get pre-approved car loan options, so you know the terms of your financing before you shop for a vehicle.
- Getting a loan from an online lender: Online lenders such as RoadLoans, which works directly with the consumer, enable car buyers to apply for car loan options on the Internet. Qualified applicants have the chance to get pre-approved financing through this approach too. On approval, they can print their loan documents and take them to a dealership or individual seller, depending on the loan type, to shop for their car.
- Shop around: Online, you can check out a variety of loan choices and submit an application from the comfort of your own home.
- Convenience: Besides the opportunity to apply online and for qualified applicants to get pre-approved, you may be able to access online tools and resources such as finance calculators. They can help you plan a variety of loan options and estimate budgets, auto loan payments, refinancing and more.
New vs used car loans
New and used car loans may be affected by a range of factors like your intended choice of vehicle and your credit history.
Consider using finance calculators to estimate how much car you can afford to buy, what monthly payments you can afford, and get more of an idea whether a new or used car is right for your situation.
As with your financing options, the FTC recommends shopping around for your vehicle. Talk to a variety of dealers and lenders to see what best-fits your needs.
Good and bad credit
Many lenders accept applications from people with both good and bad credit.† RoadLoans is one of these, and we even accept applications from consumers with no credit, or who have been through bankruptcy.
If your credit is less than perfect, you can read more about the financing process in our “Car loans for people with bad credit” article.
Don’t be afraid to research car loan options, and visit a variety of sources for help. The more you know, the easier it may be to find the best car loan options for your needs.
Check out auto loan options with RoadLoans and apply for financing.
* “Bad” or “Poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press), Bankrate.com, Credit.com, Investopedia, NerdWallet.com and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. FICO scores are not the sole factor in lending decisions by RoadLoans.com and Santander Consumer USA.
RoadLoans is not a credit counseling service and makes no representations about the responsible use of or restoration of consumer credit.
† These statements are merely informational suggestions only and should not be construed as legal, accounting or professional advice, nor are they intended as a substitute for legal or professional guidance.