Car Loan Rates
Interest Rate Influencing Factors
When you’re hunting for the lowest rate on car loan, there are some key factors you should keep in mind. These factors play a vital role in influencing interest rates and determining loan terms.
Secured Loans
These loans are favorites among banks and lenders. If you’re applying for a secured loan, the car itself will serve as the collateral. It means that if you fail to make payments or default completely, the bank will seize your car.
Secured loans offer some benefits too. Normally, the interest rates on these offers are lower than normal unsecured loans. This is the reason why so many people apply for secured loans.
You need to be careful in reading the terms and conditions. If you are trying to buy a used car through car loan, your bank may not accept the used car as collateral and you end up paying a high interest charge on your loan. Be sure to clear this issue with bank representatives.
Loan Terms
Many car loan lenders offer low interest rates for a longer period of time. If you are planning to get a loan offer that gives the flexibility of repaying your debt in five years, it is better to compare rates of various banks for precisely this time period. This way you get to make an accurate comparison.
Longer terms for loan payments can be tricky. Don’t extend your payment period just to get a lower repayment rate. You do get to pay a lower rate but it continues for a very long period and in the end, you end up paying a very big amount.
Be Warned: If you intend to repay your loan earlier i-e. you want to pay it off in full when you have made a prior commitment of a prolonged repayment period, you might be punished with fines. If you repay it earlier, you eat up the interest payments of your lender and will have to pay the penalty. Be sure to know the consequences for doing such a thing.
Credit Quality
It is not very common among lenders but still your credit profile can play its role in determining your interest rate. This credit analysis is somewhat similar to insurance principles. The person who brings more risk to the insurance pool pays a higher premium for it and vice versa. Same case applies in car loans.
Good credit history means you get a lower loan rate. You can also get a rejection on your loan application for having a terrible credit record.
Featured Personal Loans
| Personal Loan | Details | Min Interest Rate | Min Comparison Rate | Min Loan Amount | Min Loan Terms | Apply Fee | |
|---|---|---|---|---|---|---|---|
 ME Bank Personal Loan | A low rate personal loan from ME Bank with no application fee for a limited time. | 13.59% | 13.81% | $5000 | 1 year | $0 |   |
 Aussie Personal Loan | A smart way to consolidate your bills to save time and money so you can pay for your holiday, a wedding or renovate the house. | 13.90% | 14.84% | $3000 | 1 year | $199 | |
 Sugar Money Personal Loan | Fixed rate personal loan with flexible options to get you funds when you need it. | 13.99% | 15.00% | $3000 | 2 years | $250 | |
 bankmecu Personal Loan | A convenient and fast way to purchase a car or debt consolidation with affordable rates and fees. | 13.49% | 14.55% | $1000 | 1 year | $150 | |
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