That's why we provide features like your Approval Odds and savings estimates. Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.
Some of the coverage options or discounts listed in this article may not be available in your state. When you get an auto loan, you borrow money from a lender to buy a car. You agree to pay back the funds over a set period of time, plus any fees and interest you accrue.
A car loan is paid back to the lender in monthly installments called loan payments. Your loan contract is broken down into the principal and interest on the loan, along with any optional add-ins. Longer-term loans, like month or month loans, can make your monthly payment lower.
But keep in mind that with a longer loan term, you could end up paying more over the life of the loan when you add up the interest. You may even end up owing more than the car is worth, causing you to be upside down on your loan.
Keep in mind this calculation does not include any applicable sales tax. You can use a car loan to purchase a new or used vehicle. You can also apply for a loan to buy out a lease or refinance an existing loan. You may find that new-vehicle loans have lower rates than used-car loans and sometimes come with special incentives. Ready to get started? Compare today's auto loan rates from Bank of America.
How financing a car works. Apply Now. Apply early so you know how much car you can afford. Your day rate lock Footnote 1 gives you plenty of time to shop. View rates, calculate payments and apply for a low rate loan. Purchase, refinance and lease buyout loans available. Learn more about our auto loans. Auto Loan Basics. Lock in your rate. Known as "buy here, pay here" financing, this is something to avoid if at all possible.
These loans are designed for people with bad credit, so interest rates and down payment requirements tend to be very high. If you wait until you've fallen in love with a particular car to apply for financing at the dealership, you may be more likely to accept less-than-ideal loan terms. That's why getting preapproved for an auto loan on your own before you visit the dealership can be a smart idea.
Armed with your preapproved loan terms, you can negotiate for better terms and get the right auto loan for your needs. The credit score needed to qualify for a car loan varies based on the lender and the type of financing. Auto lenders may even differ in the credit scoring model they want to use to assess your creditworthiness. As a result, there isn't one set minimum credit score that all lenders require.
That said, people with higher credit scores and longer credit histories can generally qualify for better loan terms and lower interest rates. A score in the "fair" range usually won't keep you from getting approved; however, it may mean you'll pay higher interest rates or have to make a bigger down payment.
If you have a poor credit score or simply want to qualify for the best possible terms, spend some time working on your credit score before you apply for an auto loan. Things to Keep in Mind When Applying for a Car Loan The sticker price of the car isn't the only cost to consider when applying for car financing. Here are some key terms you need to be aware of. Traditional auto loans aren't the only way to secure and pay for a car. Here are some other options that may work for you.
As you can see, there are plenty of ways to finance your new car. To get the best possible auto loan, start by checking your credit report and credit score. A good credit score gives you more choices and can help you get better loan terms. Investigating car loans from your bank, credit union and online lenders before you visit an auto dealership will give you a clear idea of your options, putting you in a strong position to negotiate favorable financing for your new wheels.
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