Back in days, purchasing a dream car was a distant reality for many people. However, car loans have changed the entire scenario and with the progressing time, several legible options have surfaced. However, one must be cautious while applying for a Car Loan because the pitfalls are usually present with merits.

These 10 facts are crucial if you are going to apply for a car loan in near future. They may even help you grab the best offers in the market.

1) It is important to acknowledge that car loans are available from various sources like banks, car dealers and private financiers.

2) You can apply for a car loan in case of both new cars and used cars.

3) If you have a strong credit profile, it makes the whole process less cumbersome. It works just like any other loan. A good credit score allows you to grab the best rates as per the market’s status. However, no need to be disheartened in other case. These days, car loan lenders provide loans to even people with a bad credit.

4) It is advisable to remit some of the loan amount as a down payment at the beginning itself. Doing that, you can enjoy lowered rate of interest and profit from it. Therefore arranging some sum is beneficial.

5) If you are facing difficulty in arranging the money, collateral security can prove to be your helping hand. The home equity is a great source for collateral.

6) If you plan for a long term plan, you will have to pay a heavy interest. Therefore, it is advised to keep the term short. If somehow, a short term in not feasible, then, you may think about car loan refinancing to accommodate your long duration.

7) You need to do a smart research yourself. On the surface, you might feel that the interest rates and deals are more or less same no matter who the lender is, but an intensive research will help you find the small differences. The competition is strenuous and private lenders are often ready to lower down their rates to meet up with it.

8) If you can get your car loan pre-approved, it is quite advantageous and helps you gain both better interest rates and price of the car in question.

9) Do check the companies offering car loans online because they can really help you with pre-approvals.

10) Many online websites also allow you to compare the loan rates offered by different providers. You can get an idea about the difference. Of course, you must always contact the provider to get the accurate rates.

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