How Are Car Loan Rates in Farmington, MI Calculated?
Various factors contribute to your Michigan auto loan interest rate, including your credit score, the amount of the loan, your income, the down payment, your loan's term (the length of the loan), and the car's age. A poor credit score, low income, or buying an older vehicle from a dealer in Farmington might lead to 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 the life of your loan. Even a rate one or two percent higher could mean spending hundreds more overall.
How Do I Lower My Auto Loan Rate in Farmington, MI?
You can use tools like our Interest Rate Estimator to get a feel for what your rate could be before having to apply for a car loan in Farmington, MI. If you've plugged in your information and aren't happy with the percentage you see, what steps can you take to lower it?
The loan term is one element you have total control over. Most car loans in Farmington 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 usually have a lower monthly payment. However, a longer term also tends to come with a higher interest rate. If you can handle a higher monthly payment, it's wise to choose a shorter term. The Auto Payment Calculator shows what your monthly payment might be with different terms and interest rates to help you see what might work for your budget.
If your credit is less than stellar, boosting your score could help lower your interest rate. Our Guide to Better Credit for Auto Financing walks you through what determines your credit score and which steps you can take to bring it up fast. It may take some effort and time to increase your credit score, but it'll be worth it once you see those lower Michigan auto loan rates.
Putting effort into finding the right lender can also help you get 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 Farmington, MI — 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. Don't forget some lenders will negotiate, so you can take an offer from one lender to the next to see if they'll beat the interest rate.
Discover the Best Auto Loan Rates in Farmington, MI with myAutoloan
myAutoloan wants to help you find the lowest auto loan rates in Farmington, MI no matter your credit score or the type of car you're buying. We'll show you up to four loans at once so you can find the best deal. Simply complete our secure online application, choose the best loan for you, and head down to a dealer in Farmington to purchase a new ride. Apply now to check today's lowest interest rates!