Five South Carolina Car Loan Tips

Getting the best car loan for your new car isn't likely to be as simple a matter of applying for one on the fly and waiting for the results. Unless you're one of the few who have taken immaculate care of your credit and considered every factor that goes into determining loan interest rates and terms, you could probably do with some pointers on preparing yourself for getting the best auto loan available to you in order to maximize your experience in shopping for South Carolina car loans.

1. Get your credit reports: You should know your credit reports from the three major credit reporting agencies very well before a bank even gets the chance to look at them. If you fly into a loan application blindly and just hope for the best, you could find yourself unpleasantly surprised by any number of factors: a disgruntled past lender whom you thought you had settled with, or perhaps even finding out that you've been a victim of identity theft and your credit has been trashed as a result. All consumers are eligible for one free credit report per year according to federal guidelines. Get yours before you apply and know what you are getting into.
2. Handle any discrepancies or issues: Once you've pulled your credit report, if there are any things on there that you can take care of within a reasonable amount of time you should do so. Things that you should clear up include paying off or negotiating away any collections accounts, paying down your credit card balances so that you owe less than 25% of your total available credit cards, and making sure you are not late on any bill payments in the six months to one year before you actually apply for your loan.
3. Consider how much car you can own: Because the bank certainly will. Your debt to income ratio is an important factor in a lender deciding just how much money they feel they can lend to you. If you have too much debt - whether it be from credit card debt, other car loans, or a big, expensive, mortgage, you present a greater risk of default to the lender and they will seek to make up for that risk by offering you a loan at higher interest rates.
4. Save up a substantial down payment: Not only does a substantial down payment for your car of 20% or more reduce the amount you have to borrow (and therefore how large your payments will be), but it also will have the effect of reducing your chances of ever being upside down in your car payments - owing more on the car than it is actually worth.
5. Don't forget your auto insurance: Something else that new car buyers often forget, but which your lender is not likely to forget is the cost of your auto insurance. Getting a new car means new insurance premiums and, depending on what you are buying, they are likely to be higher than what you were paying before - especially if you only had liability insurance on your other car, since your lender is likely to insist that you carry a minimal level of collision and comprehensive insurance coverage as well in order to protect their investment.