When you’re in the market for a new car, always remember that auto financing is just another product that a lender is selling you. To get the best deal out of your car loan, you only need two things. These are your credit report with credit score and a car loan payment calculator. Both are easily available online.
You can get a copy of your credit report from the three online credit bureaus, Equifax, Experian, and TrueCredit. Note that there is a minimum amount charge for each copy but the information that you get more than makes up for it. Once you have your credit report and find out what your standing is, as far as credit is concerned, you can then proceed to go shopping for a car loan.
As you shop, compare the interest rates and calculate your car loan payments from several lenders. There are many online tools that you can use to help you with your car loan payments. Below are some great sites that offer online car loan payment calculators.
CarBuyingTips. com – Car Loan Payment
CarBuyingTips. com is a website that offers tips and information for car buyers seeking advice on their car purchases. At this site, you can learn several helpful pointers, like whether to buy a new or used car or how to get the best deal when buying a new car or trade in a used one. The site also gives you some pieces of advice to avoid making new car financing mistakes. Their free calculators and car loan payment tools help make your life easier as you do your research before purchasing a car loan. They have downloadable Excel spreadsheets that cover budgets, car loan payments, leases, and used car bill of sale to aid you in making your offer to a dealer.
AutoSite. com – Car Loan Payment
Another site that offers a calculator to help you with your car loan payment estimations is AutoSite. com. This site allows you to compare loans and leases by entering the information in all required fields. State what the negotiated vehicle price is, the loan term, suggested vehicle MSRP, interest rate, lease term, money factor, and estimated residual value. By clicking on the ‘Calculate’ button, you can find out what your car lease and car loan payment would be.
AutoWorld. com – Car Loan Payment
AutoWorld offers an easy to use calculator to help you find out what your car loan payments would be. Simply enter a few pieces of information, including the number of month, interest rate, and amount financed and you will be able to calculate how much the car loan payment you would make every month.
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When purchasing a new vehicle, most people don’t have enough funds to pay cash and must obtain car loan financing. After deciding which type of car to buy, the next important step is finding a good lender. While you may have no problem qualifying for car loan financing, it is important to shop around before deciding upon a lender. You can do this by either visiting local banks in your area or by researching car loan financing offers online.
If you have good credit, you may even want to decide upon a lender before visiting the car dealership. This way you can get pre-approved for a set amount of cash. Once you have been preapproved, you know how much you have to spend. You won’t be as tempted to look at cars that are out of your price range. If dealers know you have already been approved for a loan, they may be more willing to negotiate a deal. Since most salespeople work on commission, they will do their best to accommodate someone who has already been approved for a loan.
Down Payment and Interest Rates
Your initial down payment will affect what type of car loan financing you receive. The greater your down payment, the lower rate of interest you can expect to be offered. Auto lenders will consider you less of a risk if you invest more in the vehicle upfront. It may be very tempting to apply for car loan financing while a dealership has a “no money down” offer, but you should be aware that the interest rate terms might be much higher.
Length of Payment Terms
Until recently the longest term for car loan financing was sixty months. Today dealers have started to offer extended payments plans of seventy-two and eighty-four months. This has caused consumers to purchase more expensive vehicles, cars that would generally be out of their price range.
While you may dream of buying a $40,000 dollar SUV, it is probably not a good idea unless you can pay for it within a five year time frame. Remember that once the warranty period is over, you are responsible for all repairs. People who finance their cars over a seven-year period often end up owing more on the car than it is actually worth.
Auto loan financing is easy but it is not without its risks. There are too many variables involved. Plus, it involves a big amount of money. What if your monthly income won’t be enough to cover the payments? What if your expenses suddenly go up and now you don’t have enough money to pay for your interest? What if…?
To counteract these risks, you need a tool to help you calculate beforehand the amount of money involved. Car loan payment estimators can estimate what your monthly payments would be, how much you have to make in order to pay for your auto loan, and how much you can afford to borrow.
There are many websites that offer car loan estimators as a free service. Below are some great places where you can get these car loan estimators and start solving your way to get financing for a vehicle.
AutoSite. com – Car Loan Estimator
AutoSite. com is an online auto financing agency that offers a free car loan estimator. Their car loan estimator has a dual function. It can calculate auto loans and leases and even compare the rates of both to see which one is better. To start using this car loan estimator available at http://AutoSite.com, simply fill in the necessary information in the required fields.
If you only want to calculate the loan payments, fill up the left side of the car loan estimator and then press the ‘Calculate Loan’ button. You can do the same thing for calculating the lease but instead of filling up the left side, enter your information into the fields to the right and click the ‘Calculate Lease’ button.
If you want to compare a car loan vs. a car lease using this car loan estimator, enter the following information: negotiated vehicle price, suggested vehicle MSRP, interest rate, loan term, lease term, money factor, and estimated residual value. After you’ve provided those pieces of data, click on the ‘Compare Loan vs. Lease’ button and view the results on the next page.
AutoWorld. com – Car Loan Estimator
Another great place to look for a car loan estimator is http://AutoWorld.com. This site features a car loan estimator that is simple and easy-to-use. The car loan estimator available at http://AutoWorld.com can help you determine what your monthly payments would be.
For example, you borrow $50,000.00 on a car at 2.7% APR for 24 months. By entering the data to the car loan estimator, the monthly payment field will automatically populate the figure, which is $2,142.43. The calculations shown do not include charges such as tax, title, license fees, et cetera.
AutoNetFinancial .com – Car Loan Estimator
AutoNetFinancial. com features two types of car loan estimators. The first car loan estimator is a quick loan qualifier. This car loan estimator will give you a general idea of the monthly loan payment you will qualify for to buy a car. To start the estimate, key in the following pieces of information: average gross monthly wage, other verifiable income, co-buyer’s average gross monthly wage (if applicable), and other expenses, such as installment loans, rent, and any other fixed monthly payments. Click on the ‘Calculate’ button and this car loan estimator will give you the monthly payment figure that you can use as basis when you’re looking to buy a new car.
There are many car loan calculators available to allow you to determine your monthly payment or even your car purchase price.
‘Buy or lease’ car loan calculators are also available. Such calculators are capable of comparing amounts, and will let you see which is the better value for you.
One limitation of a car loan calculator is that it is not a quote. This is because your actual repayments may change based on your individual circumstances.
The features of a car loan calculator are generally similar. Most car loan calculators allow you to put in the amount of money you would like to loan. Afterwards, you can select how many months you would like to pay it back. Finally, you can click the car loan calculator button and see how it works out how much you will end up paying the finance company. This would, of course, depend on how many months you choose and what their annual percentage rate (APR) is.
A car loan calculator can be offered free on the internet as an Excel Spreadsheet Download Area. It is ready to use. All of them have several loan scenarios on one 8×10 printout, allowing you to make quick decisions about your car loan. You can also find car loan calculators online at E-LOAN and Capital One Auto Finance. If you have a PocketPC type PDA, you can download a version of some car loan calculator for PDA. You can use the spreadsheets to compare online auto loan rates to the car dealer auto loan rates. New car financing has never been easier for you.
Here are some general kinds of car loan calculators and see which works best for your car loan needs.
Free Car Loan Calculator – There are tons of free car loan calculators around, especially on the internet. Remember most of the calculators are just to work out what your ideal monthly payments should be and are NOT a quote. There are free car loan calculator links all over the net.
New Car Loan Calculator – New car loan calculators help you work out your ideal monthly payments. A lot of new car loan calculators can be used for a variety of uses like used car loans. With this calculator, you can usually enter your own interest rate for your loan.
Online Auto Loan Calculator – There’s quite a lot of online car loan calculators out there that you can use and you’ll find links to online auto loan calculators that can hopefully help you find the best deal.
Why are car loan calculators useful? You’ll need to calculate your car loan payments and look up dealer costs for cars and trucks. Without the knowledge you have derived from using a car loan calculator, you could miss out on a good deal. Bank and finance companies could take advantage of your lack of research.
As you try to arrive at how much car you can afford with car loan calculators, don’t think in terms of the monthly payment or just of the total price of the car. The monthly payment, as we’ve seen, can be manipulated just as easily and both approaches leave out other costs associated with the car, such as insurance, fuel and maintenance. To truly understand if you can afford a car, you must take all these factors into consideration. There are ‘how much car can you afford?’ calculators which will help you arrive at a close approximation. They work in the same way as car loan calculators.
There’s still more to do before you actually start shopping for a car of your own. Decide whether you should buy a brand new or a pre-owned vehicle and whether you would be better off buying or leasing. There are pros and cons to both questions. Either way, car loan calculators can speed up your decision.
Most banks have strict policies about whom they will lend their money to and for what the money will be used. They will not grant you a car loan for a used car which is older than five years. They charge higher interest rates on loans for used cars than on loans for new cars. And very rarely do they grant loans to people who fall under the “subprime” category.
A person who is considered a subprime borrower is one who has a blemished credit history. He may not be paying his bills on time or he may overextend his credit card. A subprime borrower is usually someone who has a credit score below 620. If your loan application has been rejected on the grounds that you belong to this credit-unworthy group, does this mean that you cannot borrow anymore?
You may still get a car loan if you will look for lenders that grant financing to subprime borrowers. Avoid finance companies that advertise “1.9% interest**”. Notice the sign (**)? Below the big ads, written in fine print, the ** means for prime borrowers only or for people with excellent credit. Clearly you do not belong to this worthy group. People with bad credit will have less privileges when getting a car loan. The interest rates are decidedly high. You may opt to search for online lenders. But there are measures you may take to improve your circumstances.
The first thing to avoid is to rely completely on the car dealer. He will always get a certain percentage out of car loan transactions. In fact, it will be advisable if you are able to secure a car loan before you allow a car dealer to be within a shouting distance from you. When you look for a credit grantor, don’t accept the first one you encounter. Compare interest rates offered by lenders, but don’t accept the average rates they give. A lender may offer a lower interest rate for a person with a credit score of 800 and a higher interest rate for someone with a score of 600. Ask for specific rates. You may also approach credit unions and banks where you have a current account.
You also have a chance to improve your “category” by checking your credit report and reforming your credit score. For example, there might be an error in the information found in your credit report. This error may have been the one responsible for the black mark on your credit history. You must immediately have this error corrected by informing the credit bureau in writing.
Credit scores can change. If you pay your bills on time and if you always stay within your budget, then your credit score will likely improve. Once you have a higher number, you may get a lower-rate refinancing for your car loan.