Four Tips for receiving the Best Pre-Owned Loans
To help you get the best used car loan here are four tips for receiving pre-owned vehicle loans in today’s changing and challenging credit environment.
1.Think like a Banker
Even if you are convinced that the auto you have your heart set on buying is valuable your banker may be harder to persuade. After all it is not going to be the banker’s or loan officer’s driveway but in yours, and if they hand you a big pile of cash to go buy it and all you hand them is some loan paperwork and a car title, they may feel a little bit insecure about the whole arrangement. We all know that car titles have value, but they are really nothing but pieces of paper that are backed-up by a vehicle, and if the vehicle they represent is a clunker then that piece of paper is not worth all that much. But the paper money your lender gives you has pictures of historical presidents on it and is fully backed by the Treasury of the United States Government. Think like a banker, not like a car buff, and you’ll begin to understand why those lenders have such tight purse strings. Would you trade a suitcase full of cash for a car title to a pre-owned car you’ve never taken for a test drive? Now you get the picture.
2.Adjust Your Expectations
Now that you see the banker’s perspective it is easy to “get it” why they might want to charge you higher closing costs, ask for a larger down payment in order to approve your loan, or require better credit and a higher FICO score. Or they might be willing to assume what they think of as added risk – but only if you are willing to pay them more by agreeing to a high interest rate. Get ready to make some kind of compromises along the way, because nothing is going to be handed to you on a silver tray. The banker is only there to make a profit for his or her bank, and one way or another you’re going to have to contribute to that profit margin.
3.Work on Good Credit and a Hefty Down Payment to Save Money over Time
Lenders love borrowers who come in to the office armed with high credit scores and a good down payment, because those things reduce the lender’s risk and fear that you will not repay the loan they give you. Larger down payments also convey the idea that you have assets like a good job or other source of steady income and that you know how to save money and handle for finances. Add it all up and a higher than normal FICO score and an impressive down payment of 20 percent or more translates into a VIP borrower that the bank will want to keep as a customer. You’ll likely be entitled to a lower preferential interest rate and reasonable pre-owned loan terms which will add to your overall savings and financial strength over time.
4.Let Your Computer Do the Heavy Lifting
Now that you know how to think like a lender and impress the lender, start haggling with them over your loan from the strongest possible negotiating position. The best way to do that without walking your legs off is to use a computer to compare loan prices and terms from a number of competing banks or pre-owned car loan lenders. There are many websites that will give you up-to-date information and quotes from multiple lenders, so you can narrow down your choices online before you ever go to visit with a lender in person.
Make the loan work in your favor by getting a reasonably priced loan with a good rate of interest and manageable monthly payments. That gives you the keys to the car, and with a car at your disposal you might suddenly have more prestige, more fun, or more facility to get to school or work and eventually make more money. As long as you get what you want out of the pre-owned car loan arrangement it is a winning situation, so don’t lose sight of that fact and stay encouraged as you go through your loan application process.
loading...
