Auto Loan Questions And Answers
7 Questions and Answers About Auto Loans
Question 1: How does applying for an auto loan online provide any benefits?
Answer: The biggest edge of applying for an auto loan through the Internet is that application process and decision making is less complicated and usually provides the opportunity to get the best annual percentage rates. In addition, you can apply through the comfort and privacy of your own home. After submitting your online auto loan application, the auto lender will inform you within a few minutes if you have been approved or not for your auto loan.
Question 2: What basic requirements do I need to fulfill when applying for auto financing?
Answer: The following are the basic requirements that you must meet to apply for car financing - 1) You must be at least 18 years of age, 2) Your gross monthly employment income and other sources of income should be a minimum of $2,000 for a direct auto loan, but can be less when using indirect financing through the car dealer, 3) You need to show proof of residence history and employment history showing of at least two years at the same residence and company.
Question 3: What is the difference between direct and indirect car financing?
Answer: Direct car financing is a cash voucher or draft approval from a financial lender for buying at a dealer of your choice. An Indirect car financing means you get financing from the car dealer.
Question 4: What is the difference between prime car loans and subprime car loans?
Answer: Applicants who have excellent credit can apply for prime car loans. Lenders offer desirable rates for prime applicants because they have proven that they can manage their credit. Subprime auto loans, is for people who do not have excellent credit and usually the terms and rates are not as attractive prime car financing.
Question 5: Is it needed to choose my car before I apply for an auto loan?
Answer: It will be better not to select the car first since you should know the amount and price range that you can comfortably afford. Your first task is to apply for direct auto loan financing. Once you are approved, you will receive an electronic check for a maximum amount of money to spend, based on your current credit standing and your current debt-to-income ratio. You will simply complete the electronic check by filling in the amount for the cost of the vehicle.
Question 6: What are some of the factors in determining the auto loan interest rate?
Answer: The annual percentage rate (APR) that you will pay for on your auto loan depends on several aspects. First, auto loans depend on an applicant's credit history - the better your credit score, the lower your interest rate. Furthermore, your interest rate also depends on loan term and on whether you are buying a new car or a used car (the year of the vehicle).
Question 7: How much is the down payment for the car typically?
Answer: If a down payment is required to purchase the car, they are typically 5-10%. The amount of the down payment is determined by your credit history also..If you have excellent credit history, you will pay less for the down payment in addition to the attractive annual percentage rate.
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