Car Loan Basics

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Applying for car loans online should not only be hassle-free but also comprehensible. The information provided in many online pages must include the information on what agency actually provides the financing. Getting a car loan needs to be transparent and comprehensible. Knowing who grants the financing will help you understand your options—especially if you have experienced or are having difficulties with your credit. This information will be helpful when assessing personal information such as your personal credit and employment history, debt-to-income ratio, and other factors. They may help you narrow down financing options in terms of the total cost of your car purchase or the interest you have to shoulder.

There are basically two primary channels available to consumers who need an auto loan: direct bank financing and indirect car dealership financing.

Direct Bank Financing

This type of financing is a direct transaction between you and a financial institution. In this type of deal, you apply directly and secure approval first for a loan before visiting a car dealership. This type of auto loan allows you to acquire a car similar to a cash buyer and do away with the hassle of going through car dealerships. This is provided mainly by personal banks and credit unions, and national banks and car loan companies as well.Many financial institutions that offer direct financing, however, normally serve the prime and near prime credit customers. Your chances in qualifying for a car loan may not be good if your credit score falls below 625 or if other car loan information and requirements such as the length of time on the bureau and high credit amount do not meet certain criteria.

Get your credit score here or use our Car Loan Tool to see if you qualify for a loan

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