Auto loan calculators are a dime a dozen on the internet. But, if you want to get the lowest monthly payments on your car loan, you need to use the right one. Here are some tips on how to use an auto loan calculator to get the best deal:
Know your credit score
Your credit score is one of the most important factors that lenders look at when determining your interest rate. The higher your credit score, the lower your interest rate will be. So, before you start shopping for a car, check your credit score and get it as high as possible.
Shop around for the best interest rate
Once you know your credit score, you can start shopping around for the best interest rate. Don’t just go with the first lender you find. Talk to multiple lenders and compare interest rates.
Use an auto loan calculator
Once you’ve found a few lenders with good interest rates, it’s time to start using an auto loan calculator. This will help you compare different loan terms and see which one will give you the lowest monthly payments.
Get pre-approved for a loan
Once you’ve found the loan that gives you the lowest monthly payments, it’s time to get pre-approved for the loan. This will give you the negotiating power you need to get the best price on the car.
Make a large down payment
Making a large down payment will lower your monthly payments. So, if you can afford it, make a down payment of 20% or more.
Get a shorter loan term
A shorter loan term will also lower your monthly payments. So, if you can afford it, get a loan with a term of 36 months or less.
Refinance your loan
If you can’t afford the monthly payments on your loan, you can always refinance the loan. This will give you a lower interest rate and lower monthly payments.
Pay off your loan early
If you want to get rid of your car loan as soon as possible, you can always pay off your loan early. This will save you money in interest and help you get out of debt faster.
Keep your car
If you’re not ready to get rid of your car yet, you can always keep it and use it as a trade-in when you’re ready to buy a new car. This will give you some equity to put towards your new car.
Sell your car
If you’re really struggling to make the monthly payments on your car loan, you can always sell your car and pay off the loan. This will get rid of your debt and help you get your finances back on track.