Asking certain questions of your lender before you commit can help you save a lot of money on your auto loan. We’ll tell you all of the things you should ask before you sign your loan papers.
What’s the APR and how will it change over time?
If you get a loan with fixed low auto finance rates, you won’t have to worry about your APR changing over time. However, if you have a variable-rate loan, it’s important to find out how long the initial fixed period lasts and when your interest rates adjust after that. The APR, by law, must be disclosed in your consumer loan agreement in bold. This is the best representation of the total cost of the loan. When comparing low auto finance rates, look at the APRs first.
Is this rate the best for which I can qualify?
Ask your lender if the low auto finance rates you receive are the best you can possibly get. You want to make sure you are qualifying for the best rates for that month, week, or day. This can save you money on your monthly payments.
Will you lock in this interest rate for free?
When you shop for low auto finance rates, you will be quoted an interest rate that you want to be sure will remain the same until the deal is closed. Ask your prospective lenders if they are willing to lock in the interest rate you were quoted, and, if so, how much it will cost to do so.
What’s the loan’s term?
The loan’s term refers to how long you have to repay the loan. Remember that longer-term loans sometimes have low auto finance rates, but they will cost you more in total interest expense over time.
What is the exact amount of my monthly payment?
You want to get an exact figure on your monthly payment that includes principal, interest, and any charges and fees. Having an exact figure will help you budget for other expenses, like rent, utilities, insurance, etc.