Getting a new or new-to-you vehicle is exciting, and at MMCCU we’re here to help you through the auto loan process. If you’re not quite sure what you need to know about auto loans, this is the page for you!
Where to apply for an auto loan:
You spend a lot of time searching for just the right vehicle. When it comes time to finance that vehicle, it can be easy to simply accept the dealership’s financing options. Before you do that, however, it’s important to know that you might end up paying a higher interest rate than if you were to go to a lender. Also, dealerships often offer cash back OR a low interest rate, but usually never both. Take the cash back and finance with your local financial institution (credit union). Your interest rate may be higher with the local institution, but you will end up paying less in interest and costs because you end up borrowing less money by taking the cash back. Be sure to shop around to find the best financing for your new vehicle.
What to consider when applying for an auto loan:
Comparing loan options and offers from several lenders can help you save a significant amount of money. Terms can vary from lender to lender, with some requiring a down payment and offering different loan terms than others. When comparing lenders, determine which types of loans they offer and if they have any special requirements. For example, some lenders may only finance new and used cars, while other lender might offer a range of loans (such as for a refinance or a lease buyout). Financing used cars can require additional information to be provided to your lender. Also, vehicle age and mileage may play a factor in determining what interest rate you receive.
Why credit matters when getting an auto loan:
Having an excellent credit score will help you get the best auto loan rate. Oftentimes, a lender will have a minimum credit score requirement, though there are lenders that will look at a person’s overall financial picture and payment history. Before applying for an auto loan, review your credit reports and dispute any errors.
What paperwork you will need for an auto loan:
Though sometimes you can complete the auto loan process over the phone or online, most times you’ll need to submit documentation in-person. Requirements vary by lender, but typically you will need: paycheck stubs, proof of residence, and a valid driver’s license. You may also need to sbumit the purchase agreement, registration, title, and lease buyout instructions (if applicable) to the lender during the final stages of the car-buying process. Proof of auto insurance is also sometimes required.
Auto Loan Checklist (what to bring with you):
1. Proof of identity.
2. Proof of income.
3. Proof of residence.
4. Vehicle information.
5. Current vehicle registration (for trade-in)
6. Proof of insurance.
7. Proof of down payment.
As always, if you have any questions, our friendly team is here to help! Just give us a call at 715-387-8686, email mmccu@mmccu.com, or chat with us on the website! More auto loan information here.