A person buying a used car will most likely need to apply for a used car loan either before or during the process of car purchase. Used car loans can be had from banks, credit unions, auto dealerships, and online financing companies. It is easiest to apply for a used car loan through the Internet. This is because you can find hundreds of car loan lenders competing to get customers. Therefore, there's a higher possibility of getting a lower rate for the used car loan than from a randomly chosen bank or dealership.
It is really easy to apply for a used car loan on the Internet. All you need to do is fill an online vehicle loan application form wherein you could obtain a quote on the same day. In fact, you can get a used car loan at lower rates by comparing the different rates from different companies. It is always better to apply for a used car loan if you have a good credit score (at least 680). People with a bad credit score end up paying higher interest rates. Thus, you should apply for a used car loan only after you get your updated credit report with your credit score. If you have a credit score that is less than 540, then you should apply for a car loan only after you learn how to repair your own credit score.
Most banks do not issue loans for used cars that are more than 4 or 5 year old. This is because there is a higher risk of the car breaking down and going in for repairs, as they grow older. Generally, banks charge at least 2% higher APR on used car loans than for new car loans. However, as said before, online lenders are cheaper and tend to use car loan rates that are closer to the rates of new car loans.
