Car Interest Rates

Car interest rates are crucial when you are looking for a used or new car. The rates are important because they affect the overall purchase price of cars directly. If you are planning to find the lowest car interest rate possible, find out about specific requirements to get your car loan:[br]

• credit history

• stability of job

• residence and debt-to-income ratio

 

These days, it is easy to get a car loan within 70 months of the repayment tenure.

Best Car Interest Rates: Requirements

Banks and credit unions look into certain requirement before they go ahead and grant low car interest rates for new cars and used cars. Here are some of the most important requirements:

 

Excellent Credit History and Score: Banks offer the lowest car interest rates to customers who have excellent credit scores and histories. When deciding on the interest rate, a bank or any other lender will consider your personal credit score as the most important requirement. If you have a credit score of more than 750 and a credit history shows that you have made your repayments on previous loans promptly, the banks will consider offering those car loans at low interest rates.

Good Debt-to-Income Ratio: While evaluating your loan application, a bank will compare your monthly income to your monthly expenses and other obligations that you have such as:

·        rent or house payments

·        car loans

·        credit card payments[br]

 

If you have a low debt to income ratio, the bank will reach an analysis that you are a careful, responsible spender who knows how to conform to a planned, monthly budget.

Stability: Most banks consider how long you have been staying at your current residence and how long you have been working at your current office in order to be able to afford their cheap car interest rates.

Start the process to get low car interest rates by contacting a credit union or a bank. The credit unions charge 5-5.5% interest rate. Any car loan should not exceed 5.5% if you have a good credit history and score. Explore the local market for incentive schemes.

If you can get a pre-approval from a lender, you will be in a better position to negotiate. If you have a good credit history, you can get used cars at 5-6.5% interest rate. Remember, used car interest rates are usually higher than new cars.