There are some modes of car financing available to borrowers. First, there is an auto loan with rebate. The purpose is to attract borrowers to a specific bank. Second, there is a fast approval, low amortization car loan, on flexible payment terms, 24-hour approval for new and used cars. The third is an “apply online fast approval affordable used car loan.” Then there a fast cash loan for a dream car.
In a booming economy, with transparency in the financing process, better rates, and the explosion of information in the Internet, car buyers today are more informed about the benefits and risks of getting car financing and can make better decisions about the vehicles they plan to purchase.
The most comfortable car financing route to take is through a bank. If you already have an account in one or two banks, you can choose between which among the banks offer the lowest interest rate. Banks have branches for you to transact with, personally or online. Since you already have a file of your record in the bank, the application and approval are usually quick, since they can quickly obtain the necessary information. Once you get the financing, even if you are still paying for the car, the bank lists you as the vehicle’s owner.
In a bank loan, you can spread the monthly amortization up to five years, although the longer the length of time you schedule your payment, the higher would be the total amount. In making a car loan through a bank, you need to show proof of an excellent credit rating for fast approval.
Car financing through Credit Unions or Cooperatives is another option. Cooperatives and credit agencies are nonprofit financial institutions that offer more competitive rates than banks, but one requirement is becoming a member before you can get car financing. One significant advantage of funding through a credit union or cooperative is that these organizations are less strict than banks. A member can still get approved for a car loan even with a failing credit rating.
Another type of car financing is through a lease. Under this arrangement, a financier buys the car and leases it to the borrowing party. Fixed monthly payments are paid by the borrower to the lender. The borrower is also responsible for all the car maintenance and repair during the term of the lease. It’s as if the latter already owns the car.
Once the lease period expires, the borrower may return the car to the lender, or refinance the car. The borrower may buy the car by paying the remaining amount. Unlike car financing through banks, the borrower is not the listed owner. Once the lease contract ends, the borrower may opt to purchase the car and establish ownership.
You can use your home as equity in car financing. Financing institutions usually approve such an arrangement.
Another type is through a dealership car loan, offered directly by dealers to car buying customers since dealers are have established connections with various lenders who can help you get approved for a loan quickly with less paperwork. However, according to industry experts, interest rates can go up to 5 percent higher than bank facilities. This arrangement can add up to a significant amount in the long run.