In the earlier days, if you wanted to get a car loan, you were required to visit a bank or other loan provider. The process involved more paperwork as you had to fill in forms in person.
You were then supposed to wait for your bank or lender to evaluate your loan request. All of these processes result in extended time for one to be approved for a loan. Nowadays, things have evolved with most financial institutions available online, offering car loan information on their online platforms.
In addition, through these platforms, you can apply for a car loan without skipping any step in the auto loan process or having to visit a credit union or a bank branch. Below are the top reasons why you should consider an online car loan.
1. Internet is Always Operational
Generally, most banks operate on limited hours past which you can’t visit the bank. Even with the extended bankers’ hours, including working on weekends, it is impossible to match the all-time services available with the online lenders. As a result, you can easily apply online for car finance at any time, and receive a decision fairly quickly, saving you time and fitting into your routine.
2. Availability of Better Rates
A reduction in overheads and operational expenses means that most online lenders are better positioned to offer low-interest loans for used and new cars. However, bear in mind that this is not the same with all online lenders. For this reason, it is recommended that you look for lenders without physical branches and find out their rates for online car loans. This will help you settle for that with favorable rates.
3. Fast Loan Approval
Generally, most online lenders have systems in place to help you get approved for your loan within the shortest time possible. As a result, this works to your advantage if you are purchasing your car on the weekend. Responsible lenders will still have a manual review process for applications though, so it pays to find out when they’ll be in the office to finalise your loan and disburse funds if approved.
The most convenient way to do your car shopping is to get a conditional pre-approval from the lender before you go – these usually last up to two weeks so you can look at cars at a time that suits your schedule, knowing how much you can spend. Which brings us to our next point.
4. You May Get Pre Approved
Getting a preapproved loan deal usually helps you save money during a car purchase. With online lenders, it is possible to have your loan pre-approved waiting for release when you commence shopping for your car.
It’s a good idea to apply for the amount at the higher end of your budget, as you can always choose to reduce the loan amount to what you actually need once you find the car you want to buy – it’s more time intensive to have to apply for more funds, as you may need to have your application reassessed. Using a car loan calculator will help you estimate your car budget.
5. Access to More Lenders
The online platform presents various financial institutions within your state or even your residential area. Also, some online lenders provide car loans across the country. Be sure to take your time and research for lenders offering better loan terms, interest rates, and less costly fees.
6. Help You Avoid Dealer Financing Plans
Getting preapproved for your car loan via online lenders helps you avoid signing in for the dealer’s financing deals. As a result, this could help you avoid paying more for your car loan.
7. A Chance to Spend Your Cash on Other Essential Projects
It’s not always the most convenient or feasible option for a person with businesses to run or a family to look after, to spend a lump sum or a large amount of your savings to buy a car. The cash might be of great help in other uses like urgent business or family expenses.
8. Help You Improve Your Credit Score
By applying for an online car loan means that you will be making regular monthly payments to clear your loan. As a result, your credit score will have improved by the end of your loan repayment. A good credit score is helpful, especially when you wish to apply for more finance in the future.
9. More Bargaining Power
Getting your loan pre-approved offers you an idea of what type of car best suits your budget. The pre-approval helps you gain control of the negotiating and bargaining process. You will have more purchase control. This is because you only require a vehicle from the dealer, not a car plus financing deal this time.
As a result, you may find yourself in a better situation to negotiate and avoid any unneeded requirements from the dealer.
10. Online Refinancing Is Easy
Refinancing your car loan might help you get a lower repayment plan or reduce the loan interest rate. Most online lenders have made this a simple process by offering various online refinancing options.
If you are thinking of taking out an online car loan, be sure to do some thorough research. This will help you make an informed decision especially based on the interest rates and your financial situation.