Many people take advantage of an option known as dealer financing. Usually, they work with a finance company to provide the financing to you. If you have any problems at all on your credit history you will not qualify for the special interest rate although you will probably be able to still obtain a loan; just at a higher rate.
Bank financing is an option that is typically available as long as your credit history is good. If you have already worked with the bank in the past this will increase your chances of obtaining a loan. While a bank interest rate may not be as low as what a car dealer can offer for individuals with excellent credit, it may be better than what you could obtain at the dealership if your credit is only ‘good.’ Another option you may wish to consider is credit union financing. Of course, this option is only available if you belong to a credit union.
You may wish to consider refinancing your home or taking out a home equity loan in order to finance the cost of your new home. This basically allows you to pay cash for your vehicle with the proceeds of the loan and then paying back the money through the refi loan. In some cases you may be able to get a better interest rate with this route than you would with a traditional bank auto loan. Like other options; however, there are some disadvantages. With this option, be aware that you could be putting your house at risk, not just your car, if you run into a problem and can’t make the payments in the future.
These days it is also quite easy to simply go online and surf around for a quote from an online lender. This option has become so popular many lenders are now willing to compete with one another and offer very attractive rates.
Another option would be to simply borrow the funds from a family member of friend. Of course, this is extremely risky because it could cause problems in your relationship in the event that you run into a problem with the payments. But, if you can’t obtain a loan elsewhere because of credit problems this may be a good option. see also How to make Better Budgeting for more information
October 23rd, 2009 at 6:18 am
[...] cards, refinancing your home loan may be the most cost-effective and cheapest way to raise that extra money to help you through the next turbulent 6-12 [...]
October 23rd, 2009 at 6:28 am
[...] has had to borrow money with high APR’s (typically in excess of 35%) is now going to find funding sources more difficult to access, as many lenders have moved out of the sub prime lending market. Interest [...]