Common Misconceptions About Car Loans
Traditionally banks have been the primary source for all types of financing including automotive
. Banks continue to be a good source for financing for those who qualify for a personal line of credit. This lending product often offers the most competitive interest rate. There are a few caveats when utilizing a line of credit in place of a traditional car loan . With a line of credit consumers are only required to pay the interest every month. Although the initial interest rate may be lower than that of a traditional car loan, if you are not disciplined enough to plan out your payments so that you have the entire amount paid off in four or five years you will actually end up paying much more interest. With a traditional car loan your payments are set to include both the interest and principle portions of the loan. The amortization is decided at the start of the loan so you know exactly when the loan will be paid and how much interest it will cost. What if you want to pay the loan off early or make extra payments? Not a problem with most traditional car loans. Extra payments or paying the loan off before the end of the term will result in a lower interest payment thus reducing the total cost of the loan. Another disadvantage to using a line of credit over a car loan is that a line of credit can be used for anything and is especially handy for home renovations or emergencies. By maxing out the line of credit for a purchase of a vehicle you are restricting your options for lending in the future.
Many consumers are taking their searches for car loans to the Internet. Online it's possible to find an automobile loan through services that specialize solely in car loans. They allow customers to fill out loan applications online, and take care of the bulk of the work for them, making the entire process much more streamlined and easier for the consumer compared to conventional methods.
Applying for Car Loans in Canada Online
When you apply for a car loan online, the entire process takes about two to three minutes. The service will then forward your application to local car dealers that are interested in working with you. Many also work with customers with poor or no credit, making it the perfect financing option for people with all types of credit backgrounds.
What someone may not realize when they first apply for a car loan is what their credit rating is. Many people feel that they have near-perfect credit ratings, when in reality their credit reports could be blemished. If this is the case, qualifying for a car loan from banks can be rather difficult, as they will see the customer as a risk to them, and could ultimately turn them down for the loan that they're after.
Canada Car Loans for All Credit Customers
Regardless of your credit rating, you might be surprised if you try submitting a loan application online. Not only will you have a response within 24 hours typically, the interest rate that you could be offered might be lower than what the banks are offering. Car loan services focus only on automobile financing, and work with a large number of people and lenders, they're able to offer interest rates that are more competitive.
This enables consumers to spread their loans out over a longer period of time without paying as much interest if they were paying back a loan from another source. Lower payments mean that they get the cars that they desire, without having to put a large portion of their paycheques toward car payments each month. For people on strict budgets, this is certainly an attractive benefit.
Since many online car loan services allow consumers to apply for car loans free of charge, it's worth trying this before you spend time exploring other options. You may be surprised at how easy and comfortable the overall experience can be. Buying a new car can be a stressful process to go through, but with an online car loan, it doesn't have to be.
by: Chris George
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