How to Choose an Auto Loan? These Questions Need to be Figured Out

July. 07,2020
How to Choose an Auto Loan? These Questions Need to be Figured Out

Question 1: What is the interest rate on the auto loan?

 

I believe that many people already have some notions about the interest rate of auto loans before buying a car. Generally, the standard interest rate is expressed in terms of APR, which is the annual interest rate. In order to attract people's attention when advertising, some companies may use monthly interest rates to express interest rates. The value seems very low, but if it is converted to annual interest rates, it is not at all low.

 

Question 2: Is there a prepayment penalty?

 

Most auto loans in the United States use the Simple Interest Loan, which means that the interest calculation is based only on capital. When you repay each month because you owe the principal If it goes down, the interest you paid will also go down. Therefore, when choosing a auto loan product, be careful to see if there is a prepayment penalty.

 

Question 3: How long does it take to approve a loan application?

 

In general, the specific approval period depends on the situation of the different applicants and the lender concerned. Generally, the quickest loan can be approved on the same day.

 

Question 4: What is the term of the loan?

 

The duration of a general loan can vary from 12 to 72 months depending on the needs. Of course, the term of the loan itself can also be linked to your status in the United States. For example, some auto loans can be loaned to international students, but the loan period will be limited to the validity period of I20. Shortening the loan period can increase the monthly payment, and you should also pay attention to it when loaning.

 

Question 5: Can auto loans help improve credit?

 

A good auto loan product can help you accumulate credit records and scores. Your credit history will be calculated from the time you start to repay the loan. Therefore, before choosing a loan product, you can ask if it helps to build up credit records.

 

Question 6: What are the qualifications for auto loans?

 

As the most basic requirement for lenders, most banks or lenders must check the lender's credit history via SSN (Social Security Number).

 

Question 7: What documents should I provide?

 

SSN is generally required. In addition, basic credentials and banking information will be required.

 

Question 8: What is the way to repay the auto loan?

 

Normally, auto loans can be repaid with a checking account, but there are also auto loans that can be repaid by credit card ~