If you are considering purchasing a car, but you know you will need a car loan to do so, you should shop around to find the best rates before choosing a lender. The first thing you should do when you are preparing to apply for a loan is to get a hold of your credit score.
AnnualCreditReport.com allows you to request one copy of your credit report annually from all three of the major consumer credit reporting companies – Equifax, Experian and TransUnion – that lenders use to determine your credit worthiness. If you have poor credit, you may have a bit more research to do to find a bad credit car loan with a low interest rate. However, there are options out there, so you don’t have to settle for the first offer.
When you decide how much money you will need, you can use an auto loan calculator to determine what your monthly payments will look like for different time frames and interest rates. BankRate.com suggests avoiding lower monthly payments over a longer period as this can cost more overall when you factor in interest.