Know Average Percentage Rate for Car Loan Before Purchasing New or Used Car

Dec. 5, 2012 - PRLog -- Many borrowers might wonder as to how the average percentage rate for car loan could affect the overall affordability of the vehicle which is being financed. Typically, interest rates offered on auto loans are known to fluctuate every week and these could depend on the number of cars being sold during the past few weeks. Besides, there could be some other parameters which influence the kind of interest rate being offered. To that effect, if you are considering applying for car financing loan, it is essential that you knew these before you proceeded to apply for a loan. After getting a fair knowledge of the factors that will play a deciding role on the type of auto loan rates being provided, you may know what you can expect. Here is some vital information pertaining to the same which readers may find useful if they are out to apply for a car loan.    

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The first and the foremost factor which will have direct impact on average percentage rate for car loan could be the credit score of the applicant. If you have a good credit rating, the average auto loan rate could be low but if you have bad credit, the rate may be much higher. Secondly, interest rate offered could vary depending whether a new car or used car is being financed. Usually the average rate of interest provided for purchase of new cars will be lower than that offered for buying used vehicles. Thirdly, the duration of the loan could be another critical parameter in determining the type of interest rate that you may qualify for. Usually, a car loan with shorter loan duration will have higher interest rate as compared to an auto loan with longer loan term. Alternatively, it may also mean that interest rates charged for financing used cars will be high.  

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However, the average percentage rate for car loan may change from time to time as per market situations. In any case, you could get your average auto loan interest rate lowered by opting to pay a large down payment. Such a move could be helpful in securing the lowest possible interest rates for your specific financial situation. But for finding the right type of lender for your situation, it could be vital for you to get numerous free non-binding quotes from several different lenders and compare them by effectively using an online auto loan calculator or by making sue of some reputed comparison websites. The entire process may be tedious but specialist help is easily available online these days for free. You could seek assistance from a local expert by locating a reliable and reputable car finance service provider.