Car Loans First - Your Car Loan Information Source

Car Loan Steps - Beginner

1. The first step in any game is to know your own strengths and weaknesses. In this case, it means getting a copy of your credit report and credit score - sometimes called a FICO score.
   
   Lenders look for a number of things in your credit report including how "thick" it is. This term refers to the number of years you've used credit. The more years your credit has been reported, the thicker your credit file, which means lenders and the credit reporting agency have more information on which to base your credit score and a credit decision. "Thin" credit files or credit "ghosts" (no credit on record) are a cause of concern to lenders and can result in a denial of credit.
2. The next piece of information a lender looks at is your FICO score. This three digit number - that ranges from 300 to 850 - is based upon the accounts in your credit file and how you paid on those accounts.
   
   A score below 640 usually puts you in the sub prime borrowing range. A score of 640 to 720 puts you in the near prime category and a score of more than 720 usually places you in the prime lending category. As credit scores increase, loan rates drop and loan terms that are offered lengthen.





3. One more thing should be pointed out: new car rates are based on an analysis of your credit report. Used car loans are based on that metric as well as the age and mileage of the vehicle. The older the car and the higher the mileage, the shorter the term and the higher the interest rate.

Car Loan Calculator - Pre-Qualify

A car loan calculator is probably one of the most useful tools available for serious car shoppers. There are a number of calculators available that will allow you to create everything from amortization tables to assisting you in deciding whether you want to buy or lease your next vehicle.

Use the car loan calculator below to estimate the amount you can finance .

1.)Select a credit profile

Good Credit

700

Fair Credit

625

Sub Prime Credit

575

Bad Credit

525

Really Bad or No Score

NA

2.) Enter monthly income

Monthly Income before taxes:

3.) Enter monthly re-occurring debts

Rent or Mortgage:

Min. Card Payments:

Garnishments:

Other Loan Payments:
(Exclude utility bills and Car Loan)

Qualified Auto Loan Amount*

Enter your postal code:

USA    Canada

Used Car Loan Information

There are a number of ways to get the best deal on a used car loan. In addition to calling or visiting your local bank or credit union, the internet allows car shoppers to compare rates between hundreds of different lenders. There are also independent web sites - such as LendingTree.com - that will do this for you.

But even with the proliferation of consumer-oriented web sites, the first rule of thumb is to check your credit report and know your credit score (usually referred to as a FICO score). There are three main credit bureaus in the United States: Equifax, Experian and TransUnion. Each offers a product that allows you to access your credit report, or your credit report and credit score, a number of times per year at a cost of roughly $10-$20 per month. For an additional fee, you can also have your credit "monitored" so that anytime an inquiry is posted to your account you receive an email notification.

There is also a less expensive way to do this. By law, the three bureaus are required to furnish you one free copy of your report (without a FICO score) per year. With the correct timing (Experian in January, Equifax in May and TransUnion in September) you can cover an entire year for free. For your free FICO score, go to FREECREDITREPORTS360.com, sign up for a free account, and get your score anytime you need it.

Once you know your credit score, you can determine if you qualify for standard used car loan or if you need a subprime used car loan. As a rule, a score below 640 indicates a subprime loan while a score above 640 usually qualifies you for a near-prime or prime interest rate.

Near-prime and prime shoppers are usually able to shop around for competitive rates. If you are a subprime customer, however, the process is much different and the internet can be an invaluable resource.

Many car dealers don't offer subprime loans and just finding a subprime lender, much less one that can offer you a "competitive" subprime rate, can be difficult. So if you find yourself in this situation, what should you do?

One of the best ways is to locate a used car loan web site that caters to customers with bad credit. The best of these sites has a national network of dealers that specialize in bad credit car loans and can help you get a used car loan with the best rate for your financial situation.

And whether you have bad credit or good credit, you need to be sure to pick a web site that is a member of the Better Business Bureau and has a credit application that is SSL encrypted. That way, you'll know the company you're dealing with is legitimate and your personal information is secure.