After weeks of hunting, you’ve finally found the perfect vehicle. It may not be the car of your dreams, but it fits your needs, budget and looks better than you imagined.
Once you agree to buy the car, you’ll need to figure out how to pay for it. Most car buyers don’t pay for the entirety of the vehicle upfront. In this case, you’ll need to find a car loan that offers you the best bang for your buck.
Finding a bank with the lowest car loan rates can save you significant amounts of money over the course of the loan. Who doesn’t enjoy saving money?
Finding the best bang for your buck auto loans doesn’t have to feel impossible either. By following this guide, you’ll learn how to find the best money-saving car loan!
What Is the Best Bang For Your Buck Car Loan?
Let’s start with the basics of a car loan.
Car loans, including those that offer the best bang for your buck, are forms of money lent to you from a bank or another financial institution. You and the financial institution will determine the loan’s length and the monthly amount you will need to repay. As you repay your car loan, the bank will often hold on to the vehicle’s title until you finish paying your loan.
If you fail to pay back your loan in time, the bank may add fees. In extreme cases, the bank may repossess your vehicle.
Know Your Loan Interest Rates
There are two parts of a loan you’ll need to pay. The main part is the principle, which is the amount of money lent to you.
The second part of the loan is the interest or annual percentage rate (APR). Banks offer loans as a service, and to make money, they add interest. This interest rate will vary on several factors, including the loan size, your credit score, and credit history.
The smaller you can make your APR, the less interest you’ll pay and the smaller your monthly payments will be.
You can keep your interest rates low on future loans by improving your credit score, paying bills on time, and taking out loans only as needed. Paying a down payment on your car will reduce the overall loan amount and, therefore, the amount of interest you’ll need to pay.
If you’re looking to get the biggest bang for your buck, you need to find a car loan with a low-interest rate. Each bank you talk with will offer different interest rates to their loans.
Other Parts of a Car Loan
The main two parts of a car loan are the principal and interest rate. Beyond that, there are a few more aspects of a car loan you need to know.
The monthly payment is the amount of money you’ll need to pay to the lender every month. Several factors affecting this payment include the APR, the loan amount, and its length. You will need to adjust each of these to find a monthly payment that fits within your budget.
The loan term refers to the amount of time it will take you to repay your loan. Most auto loans come in three, four, five, or six-year loan options, with some lasting longer than six years. A longer loan term will reduce your monthly payment, but it will end up costing you more interest.
Most penalties and fees are avoidable if you’re aware of them. Many will charge you a processing fee when processing and fulfilling your loan application.
Other auto loans may have prepayment penalties for paying your loan off sooner than the agreed terms. Most lenders will add penalties and fees for late or missed payments. You’ll need to check the terms of your loans and ask your lender about any potential fees and penalties.
Get The Best Bang For Your Buck With These Great Banks!
To find the best car loan, you’ll need to research and shop around for different banks. As briefly mentioned, some banks will offer you significantly lower car loan rates compared to others.
Let’s make finding the right bank for your auto loan easier. This collection of banks offer competitive loan pricing to help you get more bang for your buck.
1. PenFed Credit Union
PenFed Credit Union offers interest rates as low as 1.39% and a loan minimum of $5,000. PenFed partnered with TrueCar car-buying service and AAA banking to offer such low rates.
The application process is pointless, and they offer a variety of loans, including new, used, and refinance loans. You must join the credit union and use the TrueCar car-buying service to enjoy these benefits.
2. Capital One
This well-known bank offers interest rates as low as 2.99% for loans as low as $4,000. Loan terms vary from three to seven years. Capital One offers competitively low rates for all credit scores, which gives you the best bang for your buck with this auto loan.
Carvana offers no minimum credit score requirements and offers low-interest rates of around 3.9% to qualified car buyers. What sets Carvana apart from other lenders is it offers a full online shopping experience. It helps you with everything from finding the right used car, financing and delivery of your new vehicle.
4. Consumers Credit Union
Credit unions often offer the lowest interest rates. This credit union offers a competitively low-interest rate of 2.69% and no minimum loan amounts. To enjoy these low rates, you will need a credit score of 640 or greater.
Consumers Credit Union is available in all 50 states and offers its members a great selection of benefits. The only potential drawback is you will need to pay a $5 fee and open a savings account with a minimum of $5. If that doesn’t sound so bad, then Consumer Credit Union may be a great auto-lending choice for you!
Get the Best Bang For Your Buck Auto Loan Today!
Finding an auto loan that offers your the best bang for your buck is the best way to save money on loan. You’ll have a new car to enjoy and a little extra money to spend on your favorite hobbies and activities.
Do you enjoy saving money and making money? Check out our latest Finance articles to learn more ways you can improve your finances.