Finance Forum: Shopping for an Auto Loan
Spring has sprung! If your Spring Fever has you itching to hit the open road in a new ride, you may be wondering about financing. A car loan can be a big decision, so it's important to understand what you're getting into before you sign on the dotted line.
Shelly Sprinkle, a consumer loan servicing officer with Union State Bank, recommends a few tips to keep in mind when considering an auto loan:
Determine your budget. Before you start shopping for a car, figure out how much you can afford to spend each month on a car loan payment. This will help you avoid overspending on a car that's out of your budget.
Know your credit score. Your credit score plays a significant role in determining whether you qualify for a car loan and what interest rate you'll be offered. Before you apply for a loan, check your credit score and credit report to make sure there aren't any errors that could be hurting your score.
“Make sure there isn’t any fraudulent activity on your report. You can check it once a year through the credit bureau as well as most credit card companies,” explained Sprinkle.
Consider a co-signer. If you have a low credit score or limited credit history, you may need a co-signer to help you qualify for a car loan. Just keep in mind that if you default on the loan, your co-signer will be responsible for repaying it.
Research auto values. It’s easy to fall in love with the shiny convertible on the showroom floor, but is it priced fairly? There are several online resources available to quickly compare the value of a car to the sticker price.
“I suggest evaluating the value through NADA.com, anybody can do that. When you go through their site, it will navigate you through your make, model, and mileage to see the base price,” suggests Sprinkle.
Shop around for the best terms for your situation. Auto financing is offered through a variety of sources such as the dealership, banks, credit unions, or specialty lenders. Compare different lenders to make sure you understand the interest rate, length of term, and any fees or penalties associated with an auto loan before you sign a contract.
Make your payments on time. Late payments can not only hurt your credit score but also result in penalties and fees. Make sure you're able to make your loan payments on time each month to avoid any issues.
Overall, getting a car loan can be a great way to finance the purchase of a new or used car, but it's important to do your research and make sure you're getting the best deal possible. Union State Bank offers a variety of free online personal finance calculators through their website, to assist in your car buying journey. The site also provides an online loan application, allowing you to apply anytime day or night.
“I recommend our online process. You can go to our website and within the loan application select a preferred officer. Once you complete the online application, you will be contacted by (Union State Bank) staff typically within 24-hours. And of course, our team is always available to answer questions by phone or in branch during regular business hours,” said Sprinkle.
About Union State Bank: Founded in 1908, Union State Bank has banking locations serving communities of Arkansas City, Newton, Udall, Winfield, and Wichita in Kansas and in Bartlesville and Edmond, Oklahoma. Union State Bank offers a full range of electronic, deposit and cash management services, as well as business and agriculture, commercial real estate, construction, mortgage, residential and consumer loans. To learn more, visit their website at www.MyUnionState.Bank.