Used car loan interest rates vary widely with those with good credit getting the best rates
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Posted On :
May-13-2010
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Article Word Count :
1014
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Buying a good used car is a process and an important part of that process is determining the used car loan interest rates that work for an individual in providing along with the price of the car, a monthly payment that is affordable and can be lived with for several years.
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On line calculators can help with this. Many used car loans will work if they are within the used auto loan rates the buyer can afford to pay. Bad credit car loans for those with poor or bad credit make this much harder to accomplish with their high interest rates. For those with good credit, low interest rate car finance makes buying a car a much easier process. No matter what the credit, doing your homework in advance before shopping for a car puts you in the driver's seat.
New cars are an overall expensive proposition. First they are costly and secondly, the value of a new car can depreciate by 20 to 30 percent in just one year! This can make you think twice about the wisdom of buying a new car, considering that the investment depreciates drastically in a couple of year's time. On the other hand, buying an old car is also not an easy decision. The buyer has to ensure that the car does not have problems that would cost a lot of money to fix. There's no point when trying to save money to make a purchase that may end up costing the buyer more than it is worth. Once you are satisfied that you have found a used car that meets your criteria, the next big issue is used car loan interest rates.
For an extremely limited number of people this is not a problem since the can buy a car without borrowing money. But even of these people and assuming they have good credit, used car loan rates may be lower than what they can realize as a return on their cash if they keep an invest it. In this situation, borrowing for low interest rate car finance is a sensible option even for people who can afford to finance the purchase.
Generally, most people ca not buy a car with cash and have to borrow. Many end up making a small down payment and get one of the used car loans from banks or credit unions. The term of the loan is between 36 and 48 months. The banks charge used car loan interest rates on the amount borrowed. There a quite a number of things that can impact used car loan rates but none more than the credit score of the borrower. Currently, and this number often varies, a borrower with what is considered a good credit score can expect to borrow for 36 months at an interest rate of 7.75 percent. Correspondingly, a 48 month used car loans currently are carrying an interest rate of 7.89 percent.
Bad credit car loans can carry a much higher rate depending almost entirely on the how good or bad the credit of borrower is at the time they make an application for the loan. Used auto loan rates fluctuate and you can expect them to not stay the same for very long. Since used car loans are amortizing loans, the borrower is expected to pay both principal and interest on the loan, on a monthly basis. Initially, the amount of interest payments will exceed the principal repayments. In time reducing principal balance, at the beginning of each month, will result in lower interest payments. The exact amounts can be easily determined on one of the many loan calculators that are readily available on the internet. This calculation is almost impossible to make with a calculator so do not waste your time trying to do it.
If you get behind and do not make payments the car can be repossessed. If this happens to you it will have a negative impact on your person's credit score and may make it very difficult for the borrower to obtain used car loans in the future and this includes bad credit car loans. This is a very serious matter so do not be careless and let this happen to you.
Bad credit car loans are out there but the interest rate on these loans is usually very high and may result in compounding the problems of the borrower. One way to look at this is to determine the amount of payments one would be able to make on a monthly basis. This figure should be multiplied by the term of the loan. Adding the amount of down payment to the calculated value will give one a rough estimate of the price of the car that one can afford. The used car loan interest rates, for which the borrower can obtain the loan, can be found out by approaching lenders.
Today this can be done quickly and privately over the internet local lending institutions. Shopping around for the best used car loan rates is now a pretty easy task. Once you have the used car loan rates and the estimated price of the car, the buyer can perform a few calculations with an online calculator. Entering the estimated price of the car and the best rate of interest will give an approximate figure of the expected monthly payments. In case this figure is different from what the borrower has in mind, the borrower can adjust the price of the car and calculate the new monthly payments, keeping interest constant. Eventually, the borrower will be able to arrive at a monthly payment that works for his set of circumstances. It is important to feel ok with the amount of money the car is going to cost every month.
Once the buyer has locked down one of used car loans he can go to a dealer and start seriously shopping to pick out the car, test drive it. As part of this process one needs to have the car checked out for mechanical issues. If you are real serious this should be done by a third party mechanic. If he gives you the green light, you are good to go! That is how it rolls so do your homework and you may find yourself with your own set of wheels before you know it!
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Article Source :
http://www.articleseen.com/Article_Used car loan interest rates vary widely with those with good credit getting the best rates_18736.aspx
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Author Resource :
When searching for lowest used car loan rates, you will find several car loans lender online. In most cases; you will get a loan decision back as soon your applicaton is received. Whether you are looking for new or used vehicle a car loan calculator can be a great tool to figure how much can u afford. To know more visit CarLoanz.net for financing car.
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Keywords :
used car loan rates, used car loan, low interest rates used car loan, car loan rates, used car financing, car loan calculator,
Category :
Finance
:
Loans
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