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How to Prepare for Auto Loans?

Jan 22, 2008
There's a lot of preparatory work you must to in order to lay a strong foundation for availing the best possible auto loan. There are several questions you'll need to answer, like, What's the amount of loan you need? How much you can pay in monthly installments, without having to compromise on your lifestyle? Can you do with a less expensive car than you have in mind? How many vehicles will help you break even? Once you have answered these questions, you must proceed to the following considerations:

1. If you possess a completely clean credit record and have never ever defaulted on any payments, the chances are high that your bank may even provide you with an unsecured loan, based on your clean credit record. However, this is very rarely seen since the credit bureaus have very strange ways of functioning. If on a certain day you are their best-rated person, the following day you can be down in the dumps just because you forgot to pay your monthly installment since it was your wife's birthday. That little mistake is enough to earn you the nationwide bad credit label.

2. Although it would mean an additional expense on your pocket, but if possible, you must get an auto loan insurance for your vehicle. In case of any unfortunate event in the future, resulting in complete damage to the vehicle, you'll have the insurance policy to cover up the outstanding balance of the auto loan amount.

3. In case you have a bad credit history, try being a little conservative about it, however, ensure that you repay all your installments on time to redeem your credit ratings.

4. You can also opt for meeting up with the auto loan brokers. They can help you significantly in the negotiation process and usually have good contacts that can get you attractive discounts on your new car.

5. If you are a full time employee with a company, you can also choose the option of getting a novated lease. Novated leases are the agreements done between the leasing company, you and your employer. The payments are deducted on a monthly basis from your pre-tax salary. In case you switch jobs in between, the agreement and the vehicle go with you too. A novated lease that is fully maintained is covered up by the leasing company for all the maintenance costs. All you pay is just a monthly sum as agreed with the leaser.

6. You can even get into a CHP (Commercial Hire Purchase) arrangement to finance your vehicle. In this method of financing, the purchaser hires the automobile for a certain period of time, after which the ownership of the automobile gets transferred to the purchaser.

7. In case you opt for a secured loan, make sure that you get the loan first off. Do not wait for insurance till the time your vehicle arrives. Your lending agent will appreciate your consideration and will probably offer you better conditions.

Irrespective of your current credit situation, you can always find an auto loan provider who can get you a tailor made loan for your needs. In fact if you go online, you can easily find several options in a matter of few minutes. So don't give up on your dream car and get yourself that auto loan to make it possible.
About the Author
Mark Robinson writes for auto-loans.guidefin.com. Visit his website for information about auto loans.
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