Your Online Car Loan: How It Works and How to Get One

Getting online car loans is a simple process, and we've put together this guide to make it even simpler. Here's how online car loans work and how you can get one.

Where to Get the Money

You have several lender options for your car loan, but not all of these options will give you the best deals. The pros and cons of the major funding sources are listed below.

• Car dealership. Most people finance through the dealership because of a lack of knowledge about alternative sources or because of convenience. As a general rule, though, you should know that dealerships are notorious for bilking customers in financing charges. The dealership excels at selling cars, not delivering the lowest rates on car loans. You also might face a lot of high-pressure sales people trying to cajole you into dealer financing.
• Bank/credit union. A bricks-and-mortar bank or credit union is another source for car loans. Banks and credit unions sometimes have competitive rates and will usually be lower-pressure than the dealership. However, physically visiting multiple banks to comparison shop can be exhausting and inconvenient. Banks keep regular business hours, so you'll have fewer opportunities to secure a car loan (no nights or weekends).
• Online car loans. With our online car loans, you are guaranteed competitive rates because our lenders compete with one another for your business. They know that, if you don't like their quote, you will have dozens of other lenders to choose from. Thus, it's in their best interest to give you quality deals. The convenience of online car loans beats any other source with flying colors.you can completely set up your car loan from the comfort of your home 24/7. No running around, no hassle.

How You Get Your Rate

You are probably very interested in the rates you can get with online car loans. Here is a list of factors that will influence how your lender determines your car loan's rate:

1. Credit rating - this is probably the single biggest determinant of your online car loan APR. Your credit score and credit history will reveal a lot about your financial habits to a lender and let them know what kind of risk they are taking by loaning money to you. If they perceive the risk as high, your rate will reflect that.
2. Term of the loan - this means how long the loan will last. Usually, lower rates are associated with shorter-term loans. Also bear in mind, though, that the shorter the loan's terms, the higher your payments will be.
3. Used vs. new car - new cars almost always have lower financing rates than used cars. Of course, there are exceptions to this rule.
4. Location, location, location - where you live has a lot to do with the rates of online car loans. Geographic location might affect how low of an APR you are able to get.

Now that you are ready for an car loan check out our car buying tips.