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Car Loan: Comparing the Rates

Updated on March 26, 2011

Benefits Of Comparing Rates Of Car Loan

When planning to buy that dream car the thing that really bothers some one is the kind of deal one would be able to secure for his car loan especially the rates car loan. But getting that best loan rate is not an easy job as that takes a lot of effort on the part of the borrower as he needs to go deal hunting. But making that effort really makes sense as the there are multiple benefits of comparing the rates car loan.

There are majorly three types of credit institutions i.e. banks, building societies and auto dealerships who provide credit for car. Now, each one of them has their own pros and cons and offerings.

Banks and other financial institutions are hardcore into the business of providing credit and hence offer lucrative deals i.e. interest rates. They also have other offers going on with the attractive rates packages. Until you really shop around and see what are the different rates that are offered to you it makes absolutely no sense to take the jump as you might always find that somebody else was offering a more competitive rate. Not just rates but sometimes these banks offer free insurance and other freebies.


People Offering Car Loans

Building societies are also quite popular in providing credit be that rates car loan or house loan rates. Building societies normally offer lesser rates than banks and other financial institutions. It is imperative for a customer to shop around for best rates car loan offered by these building societies and then take a final decision. The credit rating of a customer is also quite a crucial factor in determining the rates available for a borrower. Only by checking out various institutions that a customer can get a pretty decent understanding of his or her creditworthiness as the rates offered to him will not be equal to the rates offered to any other potential borrower with a not so good credit score. So the benefits of comparing rates car loan is not only in getting the best possible rate but also helpful in understanding the customer’s credit worthiness.

Auto dealerships are another group of people who also offer credit to the customer and quite competitive rates car loan are offered by them to select customers. As they are in the business of car selling and not solely into providing credit to the rates car loan provided may not be as competitive as banks, financial institutions or even building societies but they can provide pretty quick credit.

The benefits of comparing rates car loan are not just in securing the best possible rate but also in understanding the market acceptability of the customer as a borrower.

Summary

Rates car loan are better compared before jumping into some specific lender without much research as that can lead to not so great situations later on when you might come across more competitive rates on offer from various other institutions. There are mainly three types of credit institutions that offer credit i.e. banks, building societies and auto dealerships. Before really going for the deal one must shop around and check out all possible deals especially interest rates on offer which will also help in understanding the creditworthiness in terms of securing good rates car loan.     

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