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How to Find a Low Interest Car Loan

How to Find a Low Interest Car Loan

The prices of new and used vehicles are climbing fast in Canada. While interest rates are low enough to make buying a new vehicle affordable, rates are poised to rise soon which could price you out of the new car market. Which means the time to finance a low interest car loan in Mount Hope is now!


Interest rates, car payments, and you


If you had two car loans, one at 5% and the other at 10%, you would naturally want the 5% loan. You wouldn’t be overly upset with the 10% loan because that is more competitive than what credit cards are currently charging.


Did you know that the prime interest rate in Canada is 2.45%, so with a 5% car loan you would be paying 2.5% more than prime?


That doesn’t sound like much but what if I told you that you would be paying double the price in interest, that would catch your attention!


Interest rates impact how much your monthly payment is, if the payment is too high then you will not be able to buy the car.


Qualifying for a Low Interest Car Loan in Mount Hope


Lenders are very cautious, so if you want to qualify for the lowest car interest rates, you need a credit score over 700. You may be able to get a loan approved with a 680 but we want to err on the side of caution.


Having the right mix of credit products


If your credit score falls below 700, it could be due to a lack of active tradelines. The types of credit you have will impact your score if you have only credit cards, which are revolving lines of credit your score will be impacted because you do not have an installment loan.


You may not think this is a big deal, but the mix of credit products can impact your score by as much as 30%!


Are you buying new or used?


The type of vehicle you purchase will impact the interest rate you are charged. New cars are eligible for the lowest interest car loans in Mount Hope because the manufacturers offer in-house financing.


There is a limited number of lenders that offer Mount Hope loans for used cars. Since the number of used car loans is smaller than new cars, the lenders have to charge a higher interest rate to cover their overhead.


Getting the best car deal possible


Some websites tout their car loans, but if you want to get a great deal on a new or used car you must go to your local car dealership.


It may sound out of place with everyone shopping online but going to a local brick and mortar car dealership is the best way to get a competitive car loan. The car dealership has a robust network of lenders and can get you approved for a loan, even if other lenders have rejected your application.


Not only can the dealerships get you approved for a car loan, but they also have cars you can buy right away! This is great news given the shortage of cars in the Canadian market.


Contact Unique Chrysler for help, advice and competitive Mount Hope car finance and leasing.


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Categories: Auto Loan

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