Auto Loan Factory

Low Interest Rate Auto Loan - Increase Chances Of Getting
Approved For A Low Rate
By Carrie Reeder

Getting approved for an auto loan is easy. However, obtaining a
low rate auto loan may be a bit more challenging. When financing
any sort of merchandise, the interest rate received makes a huge
difference.

If you have bad credit, a lender will likely charge a higher
rate. In some instances, this may significantly increase the
monthly mortgage payments. If shopping for a new or used
vehicle, adhering to the following tips will increase your odds
of snagging a low rate auto loan.

When is the Best Time to Apply for an Auto Loan?

If financing an auto loan, timing is a crucial factor. For the
most part, lenders prefer applicants that display stability.
Thus, steady employment is a must. When applying for an auto
loan, wait until you have been with your current employer for
at least six months. If you have a habit of switching employers
every two to three months, an auto loan lender may consider you
a risky applicant, and increase the auto loan rate.

Establish Credit History

Before financing a home or auto loan, establishing previous
credit history will work to your advantage. Auto loan lenders
are more apt to offer lower rates if you have maintained a good
relationship with a previous creditor.

Building a good credit history is easy. You may do so by
applying for a major credit card, gas card, or retail credit
card. Upon receiving the card, make a few purchases, and pay
the balance each month. This will reflect positive on your
credit report, and quickly boost credit score.

Keep a Low Credit Card Balance

When judging an applicants credit history, lenders will also
assess whether a loan applicant can afford a particular
vehicle. If you have acquired a lot of debts, this may prevent
you from obtaining your dream car. Therefore, attempt to reduce
debts before applying for a car loan. Fewer debts will increase
your spending power, and make you eligible for prime rates.

Wait at Least Two Years after Filing Bankruptcy

If you have filed a recent or past bankruptcy, try and wait at
least two years before applying for an auto loan. After a
bankruptcy, lenders consider you a big credit risk. You may get
approve for financing; however, the interest rate may climb as
high as 18 percent.

Instead, focus on rebuilding your credit history. Immediately
following a bankruptcy, apply for a bad credit credit card. If
possible, attempt to open at least three new lines of credit.
By doing so, you will re-establish a good credit history and
improve credit score. After 24 months, you will likely qualify
for a reasonable auto loan rate.

About the Author: Try using
http://www.abcloanguide.com/autoloans.shtml for a Low Interest
Rate Auto Loan online. ABC Loan Guide's recommended lenders are
reputable and competitive in their rates.

Source: http://www.isnare.com