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Things To Consider When Shopping For An Auto Loan

When planning to purchase a new car the most important factor to consider is financing option. Although auto loans have made it easier to buy a car, there are various factors that one must keep in mind to ensure that you get the best deal.

Here are some points to consider when applying for an auto loan:

Check Your Credit Score: This is an extremely important criterion to get approval for an auto loan. Make sure you have a good credit score, as it affects the interest rate that you will be charged for your loan.
Budget: Get a clear estimate of how much you can afford for the initial down payment as well as the monthly repayments. Calculate your monthly income from all sources and the indispensable expenses to know the money you can spare for the car loan.
Check The Interest Rates: Before deciding on your loan policy, compare the rates of interest quoted. Even a slight change in the interest rate could make a huge difference in your monthly payments. You must also decide between fixed and floating interest rates.
Select Loan Repayment Period Wisely: When you are shopping for a car loan, make sure you take the loan repayment period into consideration. Although long tenured loans may seem attractive in the first place, you may end up paying a lot more as part of the interest rate. Hence, it is always advisable to choose a short-term loan with 3 to 5 year repayment duration.
Skip a payment: You should confirm with the agent if you would be offered the option of ‘ skipping a payment’. You may be offered to skip one payment a year but it is helpful in times of a financial crunch.
Secured Or Unsecured Loan: You also have the option to choose between secured or unsecured auto loans. In the former one, you have to put up collateral equivalent to the loan amount which, in most cases, is the car itself. The interest rates and monthly payments are quite low in these types of loans.

We, at Greater Central Texas Federal Credit Union, offer affordable auto loans in Killeen, TX. Our application process is simple and the loan is approved usually within a few days. For more details about our auto loan products, you can call at (254) 690 - 2274 or visit 3305 E. Elms Rd., Killeen, TX 76542.

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