Getting a car loan is an excellent way to purchase a pre-owned vehicle. When it comes to the finer details of how to get a car loan, though, misconceptions abound. To help you out, here are 7 myths about how to get a car loan:
Myth #1: Car Loans Cost a Lot
Some people avoid car loans because they are afraid of the interest. The truth is, though, that the fees and interest associated with car loans are often quite affordable compared to many loans. Check with your credit union to see how much the interest on your car loan will be. It may likely end up being less than you might imagine.
Myth #2: It's Hard to Find a Lender
At first glance, it may seem like it's difficult to find lenders for car loans. However, there are thousands of lenders spanning from coast to coast available for you to choose from. If you're looking for a credit union to loan you the money to purchase a vehicle but aren't sure where to start, check out this link.
Myth #3: I Have to Borrow from a Big Bank
There are many local options that can help you with an auto loan, so you are able to compare options from both banks and credit unions. You can see which has the best rate or loan term that works with your auto budget. Consider this: Financing a $25,000 new car for 60 months at an Arizona-based credit union will save you an average of $79 per year in interest expense compared to what you would pay at a banking institution.1
Myth #4: Fixing My Credit Score is Difficult
Nearly 33% of all Americans have a credit score of 601 or lower. The good news is that fixing your credit score is possible. Once you understand the factors that are affecting your credit score, you can begin working towards fixing it. For more information on how to fix your credit score before you apply for a car loan, check out this link.
Myth #5: It's a Good Idea to Always Pay More than the Minimum Payment
Sometimes, paying more than the minimum payment on your car loan may be beneficial. For example, in some cases, it may work to reduce your monthly payment. Paying more than the minimum is never a requirement, though, and it won't hurt your credit score if you don't.
Myth #6: I Probably Won't Qualify for a Loan
Even people with a good income and a decent credit score often feel as if they won't be able to qualify for a car loan. However, car loans are much easier to acquire than you might think. Never assume that you won't qualify before you actually apply. You might be surprised.
Myth #7: I Can't Apply for a Car Loan if I'm Self-Employed
It's true that credit unions take a careful look at self-employed applicants in order to verify their income. However, a self-employed individual is just as likely to be approved for a car loan as anyone else.
Getting a great car loan is now easier than ever before. Now that you understand the most common myths associated with car loans, feel free to contact us today to turn your dream vehicle into a rolling reality with new and used car financing.
1Based on the Credit Union National Association’s Customized Analysis of Member Benefits for Arizona, January 2017.
Rates, terms, and conditions are subject to change and may vary based on creditworthiness, qualifications, and collateral conditions. All loans subject to approval.
This article is intended to be a general resource only and is not intended to be nor does it constitute lefal advice. Any recommndations are based on opinion only.