Bank finance articles and tips

Taking the time now by being prepared, planning ahead and by using these 3 tips for an affordable car loan can help improve your chance of getting a car loan. These steps can also help you save money and leave you with the peace of mind knowing that you got the best deal possible.

1. Down Payment

By planning ahead and taking the time to save some cash for the down payment, can greatly increase your chances for getting an affordable car loan.

Take an honest look at your monthly finances for areas that you could be saving for your down payment. Maybe it is cutting out a night at the movies. Perhaps you could skip going out to dinner just once a month to save money towards a down payment to get an affordable car loan.

The next trip to the grocery store, trying using coupons and see the savings you could get here. Watch for sales on the absolutely necessary things that you do need to purchase, such as school clothes or school supplies.

Try making this a family project using a chart to track these savings. Be sure and put the extra money you save in a special fund for the down payment for an affordable car loan.

2. Clean up your credit.

As you are accumulating your down payment, work to clean up your credit score. Pull a copy of your credit report and evaluate the areas that you can improve your score.

Report any inaccuracies and contact the credit bureaus to have the errors removed from your report immediately.

Pay down your credit cards by choosing the highest interest rate card first. Pay the minimum on the lower interest rate cards, taking the extra to pay off the higher interest rate. Once you have that one paid off, go to the next highest interest rate and so on.

Close credit card accounts you no longer use by contacting the company and asking that they discontinue the account. This will remove them from the list of debtors on your credit report, improving your credit score.

By taking the time to clean up your credit report, the lender will be able to see the recent activity on your credit history. This will give the lender added confidence that you are doing all you can to keep your finances manageable.

3. Research Loan Options Available

Go on-line and compare your options for an affordable car loan. Use sites such as Lendingtree.com which has calculators to help you determine the best options that will fit your needs and wants.

Speak with your local bank. Especially if you have a positive credit history with your neighborhood bank, you may find them more willing to earn your business by offering a lower interest rate for a car loan.

If you belong to a credit union, this could be another source to get the best interest rate possible. Shop both the bank and credit union to see who will give you the best rate.

After completing your research, choose the lending institution that will give you the best terms and rates. By decreasing the interest rate, you can decrease the amount of money you pay over the term of the auto loan and keep more money in your pocket.

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By Mike Reitz
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