Online auto loans are a great way to save money and time when buying a car. By handling the loan process online, you can have a check in hand when you go “kicking tires.” You have the freedom to shop within your budget without being overcharged or pressured by the dealer to spend too much.
Consider the following things when applying for a car loan online:
Check your credit report. Credit scores affect your interest rate and whether or not you are approved. It has been said that if you have a credit score below 550, you may not qualify for an online car loan. However, most people don’t even know what their credit score is. Even if you think you have bad credit, your score may be higher than you think. Take a few minutes to get your credit report from each of the three credit bureaus (Experian, Equifax, and TransUnion). Knowing your score will give you the green light to go ahead and apply for a car loan online.
Don’t forget to add fees like registration, title, and taxes to your loan application. When you get a car loan online, you get the freedom to choose any car from any dealer that is within your budget. But don’t forget to add fees and sales taxes on the car when you apply for your loan. For example, if you want to get a car that costs $15,000, you need to find out what the tax and fees will be on that car so that you can apply for a loan of $15,000 plus taxes and fees. This way you won’t have any surprises when you go to write the deal and discover that you don’t have enough money to pay for the car because you forgot about the registration fees, titles and taxes.
A blank check doesn’t mean you have to spend it all. Most of the time, when an online lender approves a car loan, you are sent a blank check that you are authorized to fill out at the car dealer up to the approved amount. So whatever amount you write on that blank check becomes your car loan amount. If you can find a car or negotiate a lower amount, you may be able to get a car for a lower payment and less amount than you asked for. With a check in hand, you have more bargaining power with the dealer because they don’t know the amount you’ve been pre-approved for. They just know you have a valid check. Use this to your advantage and negotiate a lower price so you can get a lower monthly payment. Dealerships would rather work with you to give you a great deal than watch you walk away.
Remember, you can make your car buying experience a little easier by getting pre-qualified for a car loan online. Just be sure to consider the things that have been discussed, and you’ll have the bargaining power you need to get a car you can afford at a fair price.
Ken S., Founder
LowRateSearch
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