Car loans can come from quite a few different sources. It might seem irrelevant or maybe even overwhelming deciding where your loan comes from. But, it can make a huge difference in your overall car loan cost. Take the time to look into different possibilities to determine where you can get a car loan best for your circumstances.
1. Credit Union
If you are a member of a credit union, it's a great place to start your search for an auto loan. Credit unions often offer lower interest car loans because they are member owned. Profits are shared by members instead of shareholders. Lower interest rates can also equal shorter loan terms lowering your overall cost on a car loan. Credit unions work locally so you can get approved with a check in hand faster than with other lenders.2. Bank
Banks are a common source of car loans. Working with the bank you normally do business with can help you seal the deal faster because the bank knows your history and they want to keep your business. Banks are very competitive which can work in your favor.3. Dealership
Obtaining a car loan through a dealership can be good route to go for an auto loan. Dealerships have options and often partner with banks or they can help you secure financing through car manufactures. Dealers frequently run promotional deals and have special incentives including low interest rates. Dealers tend to be a better deal for people with good credit or on the opposite end of the spectrum someone struggling to get approved for a loan.4. Online Lender
If you are
having trouble getting approved for a car loan, online lenders can possibly save the day. Online lending services often check with lots of lenders working to get you approved. Plan on getting a lot of phone calls regarding your loan if you enter your information into one of these sites.
5. P2P Lending Source
An alternative to traditional lenders is a peer to peer lending service. Peer to peer lending websites have been gaining popularity. Individual investors pool together money to fund your loan. The investors get a return on their investment and you get a loan to buy your car. Loan approval isn't always easy with peer to peer lending, but it is worth taking a look at if you are not having any luck with traditional lenders.6. Family
A loan from a family member works for many people. Keep in mind the potential strain on the relationship if things go awry. Try to minimize stress by having a good plan set in place. Use an amortization schedule to calculate payments. Only look to a family member if you are extremely confident in your job, meaning you are not looking at a probable layoff or job loss. Make sure a loan through a family member is not just a good deal for you, but also your family member.
When it comes to car loans, don't limit yourself to just one source. At minimum, check two sources before signing on a car loan. For instance, if you are a member of a credit union, check with both the credit union and the dealership. If you are struggling getting a loan, check with an online lender and a family member. Choose the combination of your liking and begin the process of purchasing your car.
