Low Interest Auto Loans
Since few of us are at the financial level where we can pay cash for a new automobile
purchase, it will mean that we will need to get a loan for the automobile. In order to get the most automobile you
can for your monthly payment you want to make sure that you find the best low interest auto loans possible. The
less you pay in interest, the more automobile you can afford to buy while still keeping your monthly payment at a
The interest rates that will be charged on automobile loans will vary from day
to day, depending on what the market determines, but even within that fluctuation there are still factors that will
determine what rate you will pay.
Of course, your past credit history will play a very large part in determining what interest rate
you will be charged. The worse your credit score is the higher the interest rate you will have to pay. Someone with
an excellent score may get a rate of around 5% but someone with a poor or average score may end up paying 15% or
more on their automobile loan.
That can really add a lot to the overall amount you pay for the automobile as well as your monthly
payment. So, you should do anything you can to improve your credit score before you go automobile shopping.
Sometimes it can be as simple as correcting some mistakes on your credit report. Other times it will just take
time. You will need to reestablish good credit by paying all your bills on time.
Even with a less than stellar credit rating you can get a better rate on an automobile loan if you
can put a nice big deposit down on the automobile. Why? Two reasons, one it shows the lender that you do have
assets and you are in a better financial position than you were when the problems arose on your credit.
And two, it means that your lender won't be on the hook for nearly as much money so even if you do
default they won't take such a hit. Think of it like this: you're trying to purchase a $25,000 automobile. If you
don't have any money down the bank is on the hook for the whole $25,000. But if you can put down $5,000 (for
example) they are only on the hook for $20,000. That's still a lot of money but it's less and if they have to
repossess the automobile and sell it at auction they will have a much better chance of getting all their money
There was a time in my life when I was happily driving a very old automobile that I had paid cash
for. It was a wonderful little automobile and never let me down, for years. Then it just needed too much work and
it was costing me too much money.
At the time my credit was very poor but I had no choice, I needed a car. I was able to get a loan
though I had to pay through the nose on the interest rate; there were no low interest auto loans for me. The good
news is that I did manage to get a great automobile, I paid all my payments on time and now my credit is
outstanding, the automobile loan actually helped me reestablish my credit rating.