You have planned out your budget, chosen the car you want, picked out the color, and more, but you also need to find a good lender. To help you find this lender there are some questions you can ask them before you sign those loan papers.
Before you start your search for a lender, you should first decide if you plan to go with the dealership, bank, or an online dealer. Do your research to help you decide what is best for you. Some things you should consider are how convenient the loan is, if the loan has the best rate, and also your chance of approval.
Ask the lender how much money you should apply for. In most cases, you should apply for a greater amount than what you think you need. This is beneficial if your new car is more than you thought it was, or if you find a different car that is a higher price.
Your monthly payment is important to you, and you should ask the lender what the base interest rate on the loan will be. A base rate is the total yearly interest rate that is applied to your loan. You should also ask if this is a fixed rate or if it will change. You should make sure it is the best rate that is available to you. The monthly payment for a new car is one of the first things a person thinks about. You should talk with your lender and ask them what your monthly payment will be, and for how many months. You should also ask your lender if a lump sum payment will come due at the end of the loan.
You should also ask the lender if there are any hidden fees before you sign the loan papers. If your credit score is low, you will have a higher interest rate when compared to someone that has very good credit. You should also think about the taxes, insurance, registration, licensing, etc.
When a loan company offers you a loan you do not have to decide on the spot. In most cases, even though it does vary, you will be given 30 days to make a decision. This gives you ample time to shop around at other loan companies until you find the best loan, as well as shopping around for your new car.
There are some lenders that require you to purchase a car through a licensed dealership. This is something that you should know, especially if you are purchasing your car through another avenue.
The down payment is important to most people, and this is something you should inquire about. Ask the lender if they require that you pay a set amount, or what your down payment should be.
Ask your lender if you can make your payments early, and if so will there be any kind of penalty. You should also make sure there are no penalties involved if you plan to pay off your car earlier than the loan is set for.
You should also know the exact amount you are paying for your vehicle once all of the payments have been made. The lender will be able to give you this information. Ask the lender the exact amount you will be financing.
Make sure you know who your lender is, and that the deal you sign up with is sealed before you walk away from the car lot. In some cases, a car dealer will send you away with your new car, and then call you in a few days and tell you they could not get you financed at the rate they quoted to you. They will then tell you they have found another lender for you, but you will have a higher monthly payment. This is something you should be very careful about.
You should also ask your lender how soon after the approval can you pick up your new car. With some lenders, it can take from a few minutes to a few hours.
Something else you should ask your lender is if there are any vehicle limitations. Most lenders have some limitations to the type of vehicle you can purchase. The age and mileage of the vehicle is typically a limitation with most lenders.
Write down the questions you want to ask before you talk with a lender so you do not forget to ask them something. Make sure you understand every answer that they give you. Ask them many questions if you need to. In most cases, once your loan has been approved you can take your new car home immediately.
