Frequently Asked Questions !

Q.1) What is the advantage of online auto loan?

Ans. The biggest advantage of online auto loan is that the loan application and loan processing usually gives you the opportunity to get the best rate, and you are doing so by sitting in the privacy of your home. You will save a lot of time, as the online auto lenders informs you in a matter of minutes whether or not you have been approved for a loan.

Q.2) What are the basic requirements to apply for auto financing?

Ans. The basic requirements to apply for auto-financing are your age, which should be above 18, your monthly income from one source of employment and other income should be a minimum of $2,000 for a direct auto loan. You can go for indirect loans from an auto dealer if your income is less than $2,000. Also, you need good residence and employment history of at least two years at the same location.

Q.3) Explain the difference between direct and indirect auto financing?

Ans. Direct financing is a cash voucher or draft approval from financial institution for buying at a dealer of your choice. Indirect auto loan means you get financing from a dealer.

Q.4) What is the difference between prime lending and special finance?

Ans. People with good credit history and who have no latest dings on their credit history are eligible for prime lending. Special finance, which is also termed as Sub-prime Auto Loans, is for people who do not have good credit.

Q.5) Is it advisable to choose my vehicle before I apply for the loan?

Ans. Do not choose your vehicle first! The first step should be to apply for direct auto loan financing. Once you are approved, you will receive a voucher for a maximum amount of money to spend, based on your current credit standing and your current debt-to-income ratio. You will simply complete the voucher by filling in the amount for the cost of the vehicle.

Q.6) What are the factors that determine my auto loan interest rate?

Ans. The interest rate of your auto loan depends on different factors. First, it depends on your credit history - the better your credit score, the lower your interest rate. Second, your interest rate also depends on loan term, whether it is for 24 or 36 month's etc.

Q.7) Will I have to make any down payments for the purchase of my vehicle?

Ans. Down payments, if required, typically are 10% or $1,000 whichever is lower. Your current credit standing will determine the need for a down payment.