Car loan reshapes life: How to achieve financial freedom through refinancing!
Cars are no longer just a symbol of wealth. For many people, it has become a necessity. However, most people find it difficult to buy a car because it is indeed an expensive purchase. This is no longer the case because there are many entry-level cars that you can buy. Car financing in the form of car loans has made buying a car much easier.
What is a car loan?
Car loans are also called vehicle loans. The money borrowed to finance a vehicle is defined as a car loan. This can be a secured loan or an unsecured loan. Many institutions offer this loan as a personal loan, which can be obtained without providing any security for the loan.
So, what are the benefits of a car loan? How does it help buyers?
Advantages of Car Loans
1. Safety and Reliability
Safety and reliability should be your top considerations when choosing a car! As you all know, the average price of a good used car is as high as $8,000, and if you have a little extra cash, you can prioritize your family's safety and buy a better car. In addition, more modern cars are also generally more cost-effective in the long run, so you don't need to spend as much on maintenance or repairs - win-win!
2. Buy Like a Cash Buyer
Buying a car with cash always has benefits, such as negotiating power and additional add-ons. With car loan approval, you can ensure that you have the same power as a cash buyer and can unlock additional services with the car dealer.
3. Installment Payment
When you buy a car with a loan, you don't have to worry about saving for a lump sum payment, but can spread the payment into manageable installments that are suitable for you and can be budgeted for. If your credit score needs a boost, paying off a car loan is an easy way to start improving your credit score right away.
4. No Deposit Required
Yes, you can even borrow 100% of the purchase price! Life happens, so if you need a new car quickly, there are ways to get a loan. You can take your car with an auto loan you apply for, with no deposit required, so you can drive it where you want to go without having to worry about paying anything upfront.
Ways to Get a Car Loan
•Dealer Financing
It's common for car dealers to work with third-party lenders. When you choose dealer-arranged financing, the dealer acts as an intermediary between you and a bank, credit union, or other lender. This type of financing simplifies the loan process because the dealer handles the entire process.
•Captive Finance Companies
Because automakers want consumers to be able to easily buy their cars, many brands have their own financing divisions. These divisions are also called captive financing companies and include Ford Credit, Honda Financial Services, and Toyota Financial Services. When you buy a car, your dealer will likely send your loan application to its captive finance company. Alternatively, you can apply online before you go to the dealership, as long as you specify the make and model of car you want.
•Banks
When people need to borrow money from a financial institution, the first place they think of is often to go to a bank. As you might expect, a bank can help you with the financing you need to buy a new or used car. Banks tend to offer low interest rates to borrowers who meet certain minimum credit scores.
•Credit Unions
Credit unions differ from banks in that they are nonprofit institutions, not nonprofits, but they offer many of the same services as banks. Credit unions offer checking accounts, savings accounts, and, of course, auto loans. Because the members who use these various services are owners rather than shareholders, credit unions tend to offer lower interest rates. Credit unions even offer more qualification flexibility than banks, which means they are an ideal choice if you have a lower credit score.
Joe Saves Money by Refinancing His Auto Loan
Joe lives in Los Angeles and is a father of five and the main breadwinner for his family. However, his credit was severely damaged due to a car accident that totaled his car and his seventh bankruptcy. But he needed to use his car for work, to pick up his children, and for his part-time pastoral duties, and Joe was repeatedly blocked from applying for a new auto loan, otherwise he would have to bear ridiculously high interest rates. His bad credit put him at a disadvantage when buying a car, so Joe began searching online for better auto loan options and eventually found Upstart. He discovered that by refinancing his auto loan with Upstart, he could potentially reduce his monthly payment burden at a better interest rate. Through Upstart, Joe successfully obtained a lower loan interest rate, which allowed him to save significantly on his monthly car loan expenses, and saw his credit score gradually improve, which gave him hope for a stable financial situation. Joe realized that although bankruptcy and bad credit brought him many challenges, choosing the right loan partner could help him get out of the predicament.