Compare Car Loan Rates

People often apply for a loan without properly considering what difference the rate of interest makes, they will often take the first loan offered to them, without a thought as to, if they could have saved money by shopping around, it is essential to compare car loan rates.

There are basically two parts of a car loan. The first part is the length of time that the loan is over, usually from one to five years, and secondly, the interest rate, even in a very small difference in the rate of interest over dozens of payments, can make a big increase in the amount you have paid for the car, in total.

Before you apply for a loan, you need to be very clear in your own mind, exactly how much you can afford to pay each month. This amount should be reasonable, and should not stretch your monthly budget. With this in mind you should also pay the maximum you can each month, over the shortest period.

It is also essential that you compare car finance rates, therefore, you need to get more than one quote, if possible obtain several quotes, a competent loan officer should have no problem obtaining a handful of comparisons, for you to take a look through.

If possible, payoff the loan in the shortest available time, which is usually 12 monthly payments. This will save a very large amount of money, compared to five years or 60 monthly payments. This is because every month the loan is not repaid, there is additional interest.

Most people cannot afford to pay off a loan within a year, but you should strive to make the payments in the shortest possible time, two or three years would be ideal. Once you get up to four or five year, payment plans, the total interest you are paying can be large amount of the total cost of the vehicle.