A car loan is a way to borrow money from a financial institution to purchase or lease a vehicle. Car loans can be used for many reasons, including purchasing or leasing a new or used car, paying off other debts, financing college education expenses, and even buying a house.
There are two main types of car loans: short-term and long-term.
A short-term loan is typically between three months and six months in length, while a long-term loan can last up to 12 years. Short-term loans are usually easier to obtain than long-term ones because lenders are more willing to loan short-term than long-term.
There are a variety of factors you should think about when deciding whether or not to get a car loan. Consider your budget, credit history, and the vehicle you plan to buy or lease.
Before applying for a car loan, reviewing your credit score and understanding what factors can impact it is important. Your credit score is determined by several factors, including how much debt you currently have (including auto loans) and how often you’ve paid.
How To Get A CAR Loan The Easy Way | 3 Simple Steps
If you’re ready to get a car loan but don’t know where to start, follow these three easy steps.
- Figure out your budget. Before calculating how much money you need to borrow, you first need to know how much you have available to spend on a car. Use our handy Car Loan Calculator to get an estimate of what type of loan will work best for your specific needs and situation.
- Check your credit history. Your credit score is based partly on your credit report(s) information. You can obtain a free copy of each from the Annual Credit Report dot com or by calling 1-800-695-3285 and providing the last four digits of your Social Security number.
- Research car loans. Once you understand your budget, credit score, and the type of loan that will work best for you, it’s time to start researching car loans. Use our easy-to-use Loan Compare Tool to get an overview of different loan options and compare terms and interest rates online.
The bottom line is that you are only one step away from financial freedom. After taking out the loan, you’ll be able to take on new projects and strengthen your credit score simultaneously.
That said, read the terms in detail before applying for a car loan!
