Until a few years ago, a vehicle used to be considered luxury. But this is no more a case now. Owning a vehicle has become a necessity as one needs a vehicle for work, running errands, dropping children to school and so on. Zeroing in on a vehicle is tough enough. Added to that, the buyer also has the additional job of finding the best loan deals for vehicle loan.
Vehicle dealers generally tie up with finance companies or banks and offer loans to vehicle buyers. The advantage here is that the buyer need not have to go haunting for a loan. But it may be quite expensive, as there is a share in loan profits with the dealer. Hence, the buyer needs to research and find out the best loan deal.
Most banks offer vehicle loans with reasonable loan terms and will involve in lot of formalities. To find the best loan deals for vehicle loan, the buyer will have to approach several banks, request for their terms, compare them and then decide on the loan.
This is the age of the Internet and there are several vehicle loan lenders online for example, lendingtree.com. The vehicle buyer will have to do some research and get the names of these lending sites. He can then visit them for more information. These sites generally will have tied up with several lenders and provide a comparison table showing the each terms.
A vehicle buyer will have to compare the terms of various loans to decide on the best loan deals for vehicle loan. This will include but will not be restricted to comparison of interest rates. The following are the loan attributes which need to be compared:
Almost all lenders charge an upfront fee as processing charges or loan origination fees. The buyer should first check which lender charges the least.
Many lenders claim to offer a low interest rate but charge many other fees during the tenure of the loan. These will add to the loan costs. The buyer should ask the lenders for the Annualized Percentage Rate (APR) which takes into account the interest as well as all the additional fees and expresses the total as a percentage of the loan. This will facilitate easy comparison of loans.
The buyer should also consider the tenure of the loan. A loan with a long tenure may mean lower monthly payments but the overall repayment amount may be more than a loan with a shorter tenure. After making such comparisons, the buyer can decide on which are the best loan deals for vehicle loan and select the most suitable loan.