What Determines Your Auto Loan Rate in Tuscaloosa, AL?
A handful of factors impact your Alabama auto loan interest rate, including your credit score, the amount of the loan, your income, the age of the car, the down payment, and your loan's term (the length of the loan). A low credit score, high debt-to-income ratio, or purchasing an older vehicle from your Tuscaloosa dealer could mean a higher interest rate. But is a high interest rate so bad? The higher your interest rate gets, the higher your monthly bill is and the more you spend over your loan’s term. A difference of just one or two percent could mean spending hundreds more on interest.
How Do I Get a Lower Car Loan Interest in Tuscaloosa, AL?
You can use tools like our Interest Rate Estimator to get a feel for what your rate could be before you begin applying for auto loans in Tuscaloosa, AL. If you've supplied your information and don't like the percentage you see, what can be done to lower it?
The loan term is one factor you can change on your own. Most auto loans in Tuscaloosa have terms ranging from 24 months (2 years) to 84 months (7 years) in 12-month intervals. Longer terms will tempt many borrowers because they usually have a lower monthly payment. But longer terms tend to also come with higher interest rates. If your budget allows for 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 interest rates and terms to help you decide what might work for your budget.
If your credit is less than stellar, increasing your score could bring your interest rate down. Use our Guide to Better Credit for Auto Financing to better understand what determines your credit score and the steps you can take now to raise it quickly. It may take some effort and time to increase your credit score, but it'll be worth it once you see those lower Alabama auto loan rates.
Taking the time to hunt down the right lender can also help you snag a lower rate. While lenders will use 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 Tuscaloosa, AL — even if you don't have the best credit or income. You shouldn't go with the first offer you receive because there could be a better one right around the corner. Plus, 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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