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Things to Know: How to Get a Car Loan

2016 Ford Fusion from Adamson Ford in downtown Birmingham 2016 Ford Fusion from Adamson Ford in downtown Birmingham Adamsonford.com

By Sherry Holmes 

Getting a car loan is relatively easy, but there are a few things you need to know and do before you begin the actual loan process. Following these steps will help you get the best car loan possible.

First, you must understand the parts of a car loan. 

· The "term" is the length of your loan. The longer the loan, the more interest you will pay.

· The "interest rate" is the percentage of the loan you will be charged on top of your loan.

· The "down payment" is the amount of money you have to pay up front. The more you can pay up front, the lower your payments and interest will be.

Second, be sure to fix any creditor problems you might have. Some people might have a collection of only a few hundred dollars. By fixing this before you apply for a loan you will increase your credit score which could get you a lower interest rate. And of course, that means, ultimately, a lower monthly car payment. Who could argue with that?!

Third, shop around. Go to different banks and see what they can offer you as far as a loan. You might be surprised at the offers you get.

Fourth, be sure you can afford your payments. Many first-time car buyers don't factor in things like gas, insurance and maintenance expenses when they get a car loan. And ask any car owner: These factors can add up really quickly. You don’t want to start out with a new set of wheels and a massive mound of debt!

 

Article sponsored by Nationwide.

Find them on the web at: http://www.nationwide.com

 

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Birmingham Post-Herald (BPH) is Birmingham, Alabama's premier community newspaper, covering the great people, places and activities of the area.

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