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The interest rates for car loans will vary considerably depending on where you choose to take the borrowing and how good your credit rating is. Those who have an excellent credit rating will be able to get some of the cheapest rates of interest. However even if you do have a bad credit rating you can still get the best interest rate for based on your particular circumstances, if you choose to shop around with a specialist car finance website. A specialist website will gather the best quotes based on your particular circumstances and then present them to you so that you are able to make an informed decision regarding which one to take out. You do have to check the small print to make sure you understand what you are committing yourself to, financially. This will tell you how much interest will be added onto the cost of the loan, how much in total you will pay and any additional fees.
Even the cheapest car loans can come with added fees. One of them is usually an early repayment fee. This is charged if you take out a borrowing over a period and then find that you are able to repay it earlier than anticipated and will normally cost you around two months’ interest.
Also look out for any ‘admin’ fees that you may be liable for, too. A secured loan will usually come with a rate of interest that is lower than that on an unsecured loan but you will have to secure the vehicle against the loan or other asset. This means that if you should get behind on the borrowing you are at risk of losing the vehicle and any money that you have paid off the loan.
A bad credit loan will usually be the only option for those who have particularly bad credit and who have been turned down for loans in the past. When taking out this borrowing you can expect to pay a higher interest rate and the borrowing might be secured. However, a specialist will still be able to help you get the cheapest rate possible for a bad credit car loan.
If you are considering buying a used vehicle with a used car dealer then be wary of any special deal that they might try to entice you with. The used car dealer does not actually loan you the money through the dealership but will get you a borrowing from a third party. About the only time when this can work in your favour is if the loan comes with 0% finance for a period and you can afford to repay the entire loan back during this period. A far better way for getting the cheapest car loans and making a deal with the dealership is to take out the borrowing with a specialist website and then go buy your vehicle with the cash in hand. When paying cash for a car, the dealer is far more likely to knock a little off the cost of the vehicle if you are buying it outright.