How Are Car Loan Rates in Dothan, AL Calculated?
Many factors contribute to your Alabama car loan interest rate, including the loan amount, your credit score, your income, the age of the car, the down payment, and your loan's term (the length of the loan). A high debt-to-income ratio, poor credit score, or choosing an older vehicle at your Dothan dealership could mean a higher interest rate. But is a high interest rate so bad? The higher your interest rate gets, the higher your monthly payment becomes and the more you spend in total. Even a rate one or two percent higher could mean you spend hundreds more on interest.
How Do I Get a Lower Car Loan Interest in Dothan, AL?
You can use tools like our Interest Rate Estimator to get a feel for what your rate might look like before you start applying for auto loans in Dothan, AL. If you've filled out your information and are unhappy with the percentage you see, what steps can you take to lower it?
The loan term is one factor you have a lot of control over. Most Dothan car loans are available with terms in 12-month increments between 2 years (24 months) and 7 years (84 months). Many borrowers take longer terms because they typically have a lower monthly payment. But longer terms are also likely to come with higher interest rates. If you can handle a higher monthly payment, it's wise to choose a shorter term. The Auto Payment Calculator estimates what your monthly payment could be with different terms and interest rates to help you decide what you can afford.
If you have less than ideal credit, increasing your score could decrease your interest rate. Our Guide to Better Credit for Auto Financing can help you understand where your credit score comes from and the steps you can take now to raise it quickly. Your credit score may take some more time and work, but it's worth it for those lower Alabama auto loan rates.
Putting effort into finding the right lender can also help you snag a lower rate. While lenders will consider the same information, you won't receive the same interest rate from each one. You need to compare offers and shop around for the best auto loan rate in Dothan, AL — even without the best credit or income. You don't want to choose the first offer you get because there could be a better one right around the corner. Don't forget some lenders allow for negotiation, so you can take an offer from one lender to the next to see if they'll beat the interest rate.
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