A credit score spells a huge difference between a high or low rate auto loans. It is an accepted fact that good credit score will be lower your auto loan rate. It is still possible for people to avail of low rate auto loan. In order to increase your chances to avail of low rate auto loan you need to improve your credit rating. Lenders often feel comfortable providing low rate auto loan to people with good credit standing. The low rate auto loan could be anywhere between 2% to 15%. For those with bad credit, auto loan rate could go as high as 30. If you think you have poor credit rating, try to increase your rating so you can avail of low rate auto loan. You can do this by paying off any current debts, make monthly payments for debts you can fully pay off or putting money into your savings account. Your savings deposit will help you avail of low rate auto loan since this serves as your pool of funds in case of emergency.
Just because you never missed payment on your auto loan financing doesn't mean that your credit score should be high and you could avail of low rate auto loan. Paying on time is but one of the numerous factors that affect credit score. Having a number of credit availed of will let you have low rate auto loan because of the possibility of spending up to the credit limits. Another point to keep in mind is that having credit account balances above 50% of the credit limit decreases your score. Before you approach a lender for auto loan financing make sure that you have removed previous errors off your credit report. If you want to avail of a low rate auto loan financing you need to wait until your score goes up to 680. Other suggestions to avail of low rate auto loan are: if you just graduated from college, do not apply for auto loan financing until you have worked for at least 6 months. If you have moved in for the last six months, try not to apply for auto loan financing. Lenders need verifiable addresses and income. Previous auto loan financing record or a home mortgage can help. Find a stable job such as finance, engineer, etc. Self-employment rarely gets approved. Negotiate with creditors on late payments, charge off's and other negative marks on your credit report before applying for auto loan financing.
Another way to avail low rate auto loan is to pay a bigger cash down payment. The more you pay for down payment, the less low rate auto loan you will incur. Another method to avail low rate auto loan is to refinance. Refinancing auto loan is certainly a practical way to secure a car at a lesser cost. The refinancing company will pay your current balance. In turn, you are expected to make monthly payments to the refinancing company for a much lesser rate. The reason why most people are put off by refinancing is the idea that they will be made to go through rigorous processing. But this is not actually the case. Refinancing is quite easy and simple. And much more it will enable you to enjoy low rate auto loan.
Once your credit score improves, low rate auto loan will follow. You should postpone purchasing a brand new car after your credit rating improves. By then, you can avail of low rate auto loan.