Post Tagged with: "Auto Loan"

A Guide to the Various Types of Auto Loans

Approved Car Loan ApplicationAbout 85% of new car purchases are financed through loans. Approximately half of the people who borrow money to buy a car get their loans from car dealerships while the rest get their financing from credit unions and banks.

There is an 80% chance that you will be borrowing cash for you to get the keys to your new ride. As such, it pays to understand the various types of loans as well as the best auto loan rate in Utah. That said, this article focuses on your auto loan options.

Unsecured vs. secured auto loans

With a secured loan, the car acts as the collateral to the loan. That means the financing company has the security interest indicated in vehicle title. So if you default payment, the financing institution will seize the vehicle.

Other financing institutions offer unsecured loans. This means the lending institution has no security control over the vehicle. Consequently, these loans are only offered to people with substantial assets and income, as well as those with high credit scores. Additionally, due to their high-risk nature, these loans come at a significantly high-interest rate in comparison to the secured loan.

Simple interest vs. pre-computed interest

Pre-computed interest is calculated based on the total amount of the interest rate over the period of the loan. The total figure is then divided by the number of months you will be paying the loan. That means your monthly payments will include the specific amount of interest regardless of the remaining loan balance.

Simple interest loan, on the other hand, calculates the interest rate based on the outstanding loan balance. That means, if you took a car loan for $10,000 and you now have an outstanding amount of $5,000, the interest will be calculated based on the $5,000 and not $10,000.

Regardless of the auto loan that you want, shopping around is worth your while. Picking a loan is not just another paperwork procedure in car purchasing process. The loan is a purchase by itself and is likely to cost you thousands of dollars.

April 7, 2018 at 1:00 amFinance

The Nifty Tactics That Will Get You the Best Auto Loan Rate

Auto Loan in UtahWith literally hundreds and hundreds of car lending companies in Utah, you would definitely find it hard to choose one. All of them have these seemingly great offers, which make it even more difficult. And with so many of them competing for customers, many of them have decided to lower their rates, which also adds up to the already difficulty in selecting the right lender with the best offer.

Fortunately, there are a lot of things you can do to get the best auto loan rate in Utah from providers such as Wasatch Peaks Credit Union. Here are just a few of them.

Never underestimate the power of your credit report

Almost every lending institution out there, whether for vehicles, houses, or businesses, always take a very close look at their applicants’ credit report. They check for any red flags, particularly those that have something to do with your debts or your credit worthiness. When they see that you missed a payment or a deadline for one of your financial responsibilities, they can already tag you as a high-risk borrower. This could either mean higher interest rates or even a disqualification of your application.

This is why you should never forget to always make a request for a copy of your credit report. Especially when you know you paid all your dues on time. A lot of people have made the mistake of not checking their credit reports and ended up having to pay seriously higher interest rates just because of an error on their report.

Use all available online tools for comparison

Much thanks to the availability of so many different tools designed to help car loan applicants, you will now find it a lot easier to find just the package and interest rate that suits you and your financial capabilities the best. Just do some cruising on the World Wide Web, and you will find online tools such as those for comparison, for calculating the overall cost of the loan, or how much you can afford to pay.

Keep these in mind, and you definitely will have higher chances of finding and securing the best rate for your auto loan.

October 1, 2016 at 1:00 amFinance