Buying a car is often expensive, but it doesn’t have to break the bank immediately. There are plenty of ways to finance a car that range from credit to traditional personal loans. They all have their benefits and drawbacks, but if you can determine which method to finance a car works best for your personal situation you will be able to take advantage of the benefits these methods have to offer. Below are five ways to finance a car without creating too much trouble for yourself.
Secured Auto Loans
Perhaps the most well-known way to finance a car is to take out a secured auto loan. A secured loan describes when there is collateral offered to gain access to money for a car. This means that a lender will provide money for you to buy the car and monthly payments that you must keep up on. If you fail to make the payments on time, the lender may repossess the vehicle. In this case, the automobile itself is the collateral. A secured auto loan allows you to get access to funds and a vehicle that you pay off over time.
Credit
This next option is clearly not for everybody, because most consumers don’t have the credit score (or the credit limit) to make an auto-sized purchase on their credit card. You might find stories online; for example, this guy bought a family car on his American Express. So if you have a high enough credit limit, you might be able to put the whole thing on your card and pay off the money gradually. You should be absolutely sure to make the payments on time to avoid any high interest rates. But if you’re in the small percentage of car shoppers who can do this, think of the points you might be getting!
Personal Loans
What if you have most of the money you need to buy a car off Craigslist but you’re a few hundred bucks short? A personal loan might work for you. There are local lenders in nearly every major city in the U.S. who are likely to lend money for situations like this. Let’s say you live in San Diego but you flew out to Little Rock to take a look at a near-mint condition ‘69 Camaro. The buyer had indicated he might go lower on his price, but then someone else made an offer and now you need to locate the cash pretty quickly. Get online and look for personal loans in Arkansas and don’t let that deal get away!
Credit Union Loans
Are you a member of a credit union? If you are, go in and ask them about their auto loan rates and options. There are plenty of credit unions that all have their own stipulations and interest rates. They can offer a better rate than a lot of banks and other lenders. It also depends on what kind of car you are looking for. Credit unions may have different rates and options for different cars. They are known for offering reasonable loans and a wider variety of options when it comes to financing a car. If you aren’t a member of a credit union, you should think about joining one when you have the opportunity.
When you need to buy a new car, it can be difficult to spend that much money on something. Even if you have enough, you probably don’t want to spend it all at once. When you have a good credit score, gaining finances for an automobile is a great idea. Whether you take out a secured loan by offering the car itself as collateral, take out a credit union loan, work with local lenders, or get a personal loan from a bank, there are plenty of options for financing an automobile. Get started today to find the best option for your situation.