How to Shop for a Car Loan

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Set Your Budget First
Your target purchase price How much you plan to offer as a down payment Additional costs that may be due at signing, such as taxes, title fees, and dealer fees Ongoing car insurance costs Annual vehicle registration fees Ongoing maintenance and repairs
Check Your Credit Before Car Loan Shopping
Positive items, such as a solid payment history, that are helping your score Negative items, such as payment delinquencies or maxed-out credit cards, that might be hurting your score Errors or inaccuracies
Consider Whether You'll Need a Cosigner
Shop for Car Loans From Multiple Sources
Where to Look for a Car Loan
Brick-and-mortar banks or credit unions Online banks and credit unions Online lenders that provide auto financing Dealership financing
What to Look at When You’re Comparing Car Loans
Interest rates Annual percentage rates (APRs) Loan repayment terms Loan fees, including origination fees and/or prepayment penalties Costs due at closing
Consider Getting Prequalified or Preapproved
Your income Your Social Security number (if a credit check is required) Details about the vehicle you want to buy, including purchase price, age, make, and model Proof of auto insurance or the ability to be insured
Read the Fine Print Before Committing to an Auto Loan
The Takeaway
About the Author
Rebecca Lake is a freelance writer specializing in personal finance, investing and small business. Her work has appeared online at U.S. News and World Report, Forbes Advisor, CreditCards.com and Investopedia. Rebecca writes about a variety of topics for SoFi, including budgeting, saving money and student loans.
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