How Are Car Loan Rates in Eaton Rapids, MI Calculated?
Many factors affect your Michigan auto loan interest rate, including your credit score, the amount of the loan, your income, the down payment, the age of the car, 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 Eaton Rapids dealership could result in a higher interest rate. But is a high interest rate so bad? The higher your interest rate gets, the more you pay each month and the more you spend over your loan’s term. A difference of one or two percent might not seem like much, but it could mean you spend hundreds more on interest.
How Do I Lower My Auto Loan Rate in Eaton Rapids, MI?
You can use tools like our Interest Rate Estimator to get an idea of what your rate might look like before you begin applying for auto loans in Eaton Rapids, MI. If you've supplied your information and don't like the percentage you see, what can you do to lower it?
The loan term is one thing you can change on your own. Most auto loans in Eaton Rapids have terms in 12-month increments between 24 months (2 years) and 84 months (7 years). Longer terms will tempt many borrowers because they usually mean a lower monthly payment. But longer terms are also likely to come with higher interest rates. If you can afford a higher monthly payment, it's wise to choose a shorter term. The Auto Payment Calculator shows your possible monthly payment with different terms and interest rates to help you determine what might work for your budget.
If you have less than stellar credit, improving your score could lower your interest rate. Our Guide to Better Credit for Auto Financing will help you understand what goes into a credit score and which steps you can take to bring it up fast. It may take some time and work to better your credit score, but it's all worth it for getting those lower auto loan rates in Michigan.
Taking the time to hunt down the right lender can also help you get a lower rate. While lenders will consider the same information, you won't see the same interest rate from each one. You need to shop around and compare offers to find the best auto loan rate in Eaton Rapids, MI — even if you don't have the best credit or income. You shouldn't go with the first offer you receive because a better one could be right around the corner. Don't forget some lenders leave room for negotiation, so you can take an offer from one lender to another to see if they're willing to beat the interest rate.
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