You may have wondered, “What factors influence the interest rates on a car loan, and what can I do to minimize them?” It’s a valid question, and one that we completely understand. To answer this question properly we first need to break down the variables into two separate categories: external variables and internal variables.
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Despite your greatest efforts, the market is going to do what it will with or without you. Save market trends and influential shifts for the Wall Street brokers and business tycoons.
Now for the variables that you can control…
Undoubtedly the biggest influencer on your car loan’s interest, having a good credit history will help keep the interest on your auto loan low. Have poor credit and not sure how to improve it? Check out 4 ways to improve your credit.
Longer loan terms can help lower the interest rate of your car loan, but will typically increase the total amount you pay. Whether you’d like the lower monthly payments or to pay more upfront is entirely up to you.
What’s the number? That’s your debt to income ratio, and it’s another factor in determining your auto loan’s interest rate.
