As exciting as it can be to hear that you’ve been approved for a loan, it’s important not to let your enjoyment cloud your judgement.
Getting an auto loan is a great way to finance a new or pre-owned vehicle, but there are plenty of questions that you should consider asking before signing a contract for a new automobile.
- Have I compared rates? Don’t hesitate to wait a few days while you compare car loan rates. Often times, the loan sounds fair, until you realize what the interest rates are or how much you’re going to be paying after all the fees have been added up.
- Is the interest rate fixed? A fixed interest rate means that you are going to be required to pay the same amount every month. If you are signing onto a loan that has a variable interest rate, the rate can change – and so can your payments.
- What needs to be shown to the lender? Does the lender want to see your credit report? Are you going to be required to have a certain kind of insurance on the vehicle? Finding these answers will make it easier to compare the final costs of everything after the loan has been added to the picture.
Don’t sign onto an auto loan just because the first lender you applied with has approved you. There are banks, credit unions and even dealerships that are willing to help finance your new vehicle, so find out which deal is the best choice for you.