Car Loans - Shop Around, Compare Offers, and Watch The Small Print
...... the loan as well as the total amount of all interest that would accrue over the life of the loan.
2. If you agree to such a pre-computed auto loan, and then wish to pay it off early, either through refinancing or another means, the lender will usually use an outdated and expensive formula, known as the rule of 78s', to calculate a rebate of finance charges. Through this rebate you will pay a very hefty fee for paying the loan off early.
This type of loan allows the lender to apply more of the payment to interest and less to the principal balance of the loan. A pre-computed auto loan allows the lender to collect the majority of the interest due during the first half of the loan repayment period.
Shop Around For The Best Offer
If the first lender that you speak to is not offering a simple interest auto loan, with no pre-payment penalties, at a competitive interest rate, then you would be wise to walk away. There are many other lenders keen to compete for your car loan financing.
With record low interest rates, and the global lenders marketplace being created by the internet, there is a very competitive lending market. In other words, its a buyers market! And you, fortunately, are a buyer. Have a good shop around for the best deal: newspaper ads, internet, your bank, and the auto dealer. When checking with the auto dealer, remember to take into account any trade off between loan and price of the auto.
Also, remember not to just compare interest rates, but to look for hidden fees and transfer balances that my not be apparent at first glance. By thoroughly investigating all of your options, you should get the auto loan that is best for you now and, just as importantly, into the future!
This car loan article was written by Roy Thomsitt, owner of http://www.eliminate-credit-card-debt-now.com
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