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Choosing the Right Repayment Term for Your Auto Loan

Posted on Sep 07, 2012 by Thalia Green
Sep 07

When you go to apply for an auto loan, one of the questions your lender will ask is how long you want the repayment term to be. The repayment term affects two major factors: your monthly payment and your total interest cost. Before you visit the lender, learn the benefits of longer and shorter repayment terms.


Benefits of a Longer Repayment Term

  • Lower monthly payment because payments are stretched out over a longer time frame, which can help alleviate strain on your cash flow and live on a balanced budget
  • Making payments on the auto loan will provide you with more years of credit history, which can help you boost your score and get better rates on loans in the future


Benefits of a Shorter Repayment Term

  • Finish paying off the auto loan sooner, which makes that portion of your monthly income available for other purposes, like paying down debt or saving for a down payment
  • Pay less total money in interest because you are paying down the principal balance of your loan faster than you would be on a longer repayment term
  • Gain equity in your vehicle faster, which helps you avoid being underwater on your auto loan when you get your next vehicle


Choosing a repayment term isn't a decision you should jump into without understanding the implications of your choice. There are advantages to longer and shorter terms, so choose the length that works best for your needs.

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General Car Loans Tips

Bad Credit Car Loans - Why Some Are Approved While Others Are Rejected

Posted on Nov 10, 2011 by Thalia Green
Nov 10

Lenders have several reasons to turn down applications for bad credit car loans. Among the legitimate causes for denial, two of them stand out from the rest.


Incorrect Form Information


You'd think people would not be careless on an application for an auto loan, especially while having bad or poor credit. Far too often, the loan seeker gets their application rejected due to providing wrong or minimal details. Offer proof of identification, home or cell phone numbers and proof of home ownership or rent location. Make sure the application form has no typos or spelling errors; the creditors may approve a "John" but will probably reject a "oJhn."


The amount of monthly income must be stated on the form. Currently, loan companies won't bother with a borrower who can't give proof of earning at least $1,500 a month — good credit or not. The risk of a loan default makes the creditor shy away from bad credit car loans.


Going to the Wrong Company


Traditionally, car companies avoid auto loans with individuals who have a poor FICO score. Established enterprises like Toyota Financial Services prefer to take their business to people with a history of creditworthiness.


The borrower's goal should be to seek companies that specialize in bad credit car loans; not doing so is like expecting to be served hot dogs at a sandwich shop. There are more than a few moneylenders willing to take on the risks associated with bad credit car loans.


Your best way of finding a company that handles bad credit car loans is by taking your search online. For a modern financial institute, not having their own Web site is a knell for their business. You are virtually guaranteed to find them on the Internet because of this necessity.


Most creditors avoid credit options that seem risky, so act in accord and seek creditors who are willing to take a risk in bad credit car loans. As for the application form, you should treat it like a résumé and make it accurate, truthful and free of errors.

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Bad Credit Car Loans

How to Lower Your Auto Loan Interest Rate

Posted on Nov 06, 2011 by Thalia Green
Nov 06

If you think your auto loan interest rate is too high, there are many options for lowering the rate. Here are some ways that you can lower the rate, whether you have already agreed to the loan terms or just received a quote.


If you are shopping for car loans...
If you haven't signed for a loan agreement yet, your first step is to shop around and get a number of rates. Not all lenders will offer the same rate, so it definitely makes sense to shop around. Dealers, banks, and credit unions can all offer different rates on loans. If you need help shopping for loans, you can also use an online company like, which already has a network of lenders established.


In addition to shopping around, also consider making a very large down payment. Sometimes doing this can lower the interest rate. If you need an auto loan with bad credit, consider getting a cosigner. Having someone with good credit willing to vouch for your loan can help bring the interest rate to a more reasonable level.


If you have already agreed to a loan...
Even if you have already signed the papers with a lender, there are things you can do to lower the interest rate in the future. If you stay current with your payments, you can later on negotiate a lower interest rate with your lender. However, even if your lender is unwilling to lower the rate, you still have the option of shopping around and switching to a different lender. You may find that another lender is willing to offer you a lower rate in an effort to win your business.


A lower interest rate can save you a large amount of money. Whether you are in the process of deciding on a lender or want to lower a rate for your current loan, it is definitely possible for you to get a lower rate. 

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Interest Rates


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