Types of Auto Loans

Posted on Aug 8 2018 - 2:56pm by Alonzo Callahan

Approved car loan applicationOf the total number of people who borrow money to purchase a car, half of them get loans from car dealerships, while the remaining half gets their financing from internet lenders, credit unions, and banks.

With this statistics, the chances are that you will take an auto loan in Ogden, for you to get the much-wanted ride. As such, it pays to go through various types of auto loans available today, for you to decide on the most suitable one for you.

Dealer –Arranged Financing

Often, car dealerships have big establishments, which contribute to their excellent relationships with banks and other lending institutions. As such, they can provide financing. Although they do not give the loans themselves, they act as an intermediary between the banks and the customers. However, dealerships add a little percentage on the amount to be repaid, for their good.

Captive Finance Companies

A majority of major auto manufacturers have a financing department in their company. They are referred to as captive financing options, and they account for at least 30% of auto loans. They achieve this by making offers such as 0% interest for a given period, or by providing cash bonuses also referred to as rebates. This loans, however, are only reserved for a customer who has an excellent credit score. Therefore, polish up your scores before considering this option.

Credit Union

This option gives auto loans to at least 21% of people in the auto loan market. Due to their nonprofit nature, the loan rates tend to be much lower compared to other financing sources. However, note that it is not all credit unions that will lend auto loans to non-members.

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When shopping for a car, ensure you pay special attention to the total amount that you will need to pay. That is the loan figure, interest, title, fees, and taxes. Also, ensure that you get the shortest possible loan period that also comes with manageable monthly payments.