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.
Here are 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 vehicle that's outside your budget. Remember to consider other costs of vehicle ownership as well, including insurance, fuel, maintenance, registration and taxes.
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 may be offered. Before you apply for a loan, check your credit score and credit report to make sure there aren't any errors or signs of fraudulent activity that could be hurting your score. Consumers can review their credit reports periodically to help identify inaccuracies or suspicious activity.
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. Keep in mind that a co-signer shares responsibility for the debt and may be required to repay the loan if the primary borrower fails to do so.
Research auto values. It’s easy to fall in love with the shiny convertible on the showroom floor, but is it priced fairly? Several online resources are available to help you research a vehicle's estimated value based on factors such as make, model, model year, mileage, condition and features. Doing a little research before negotiating can help you determine whether the asking price is reasonable.
Shop around for the best terms for your situation. Auto financing is offered through a variety of sources, including dealerships, banks, credit unions and specialty lenders. Compare your options and make sure you understand the interest rate, length of the loan, monthly payment and any fees or penalties before signing a contract. Looking beyond the monthly payment can give you a better understanding of the total cost of financing the vehicle.
Make your payments on time. Late payments can hurt your credit score and may result in penalties or fees. Before taking out an auto loan, make sure the payment comfortably fits within your monthly budget. Once the loan is in place, consider automatic payments or payment reminders to help ensure payments are made on time.
Overall, an auto loan can be a useful way to finance the purchase of a new or used vehicle, but it's important to do your research and understand your options before making a decision.
Union State Bank offers a variety of free online personal finance calculators through its website to assist you during the car-buying process. Prospective borrowers can also complete an online loan application at their convenience and select a preferred loan officer during the application process. Once an application is submitted, a member of the Union State Bank team will follow up to discuss the application and next steps.
For those who prefer a more personal approach, Union State Bank team members are also available by phone or at a local branch during regular business hours to answer questions and help customers explore financing options.
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.