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Posted in Auto Loans
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BluRain13

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Auto Loan Online or Dealership?
Which would give me better results? Last attempt to obtain any credit was my credit union about 4 years ago - declined saying they could not give me a card if I had ANY outstanding accounts in collection. I have 2 accounts in credit report, medical bills totaling 114.00 - I will clear 1 this month. The other, I could clear also, but it will fall off in a couple of months, and after gathering more info about credit reporting, it seems I would be better off letting that happen vs. paying it and having it show up for another 7 years as a slow pay.

Credit score hovering at 600/no loans or credit utilization. paid everything past 5 years in cash. Stable (bank account, same job 10 yrs+), savings and 401K. NOTHING financed, no credit cards. I want to have a decent credit report now that I have finally become a smarter consumer, and since I need a car, I feel financing it would be the way to go.

Not looking for extravagant, need a decent, dependable car. Prefer pay off in 3 years, but might finance for 4 or 5 if I can pay off early. Recommendations, thoughts, help??? Thanks in advance for your time in sharing!

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Obtaining a loan "before" you shop around for a car is the smart choice. It keeps you within your financial budget. Sometimes going to the Dealer will result in a much higher interest rate and payment each month. Most credit unions give lower rates; however they usually have a prepayment penalty. Which means paying off early does not cut down the interest they have factored into the loan, you will still be required to pay the full amount that was agreed upon during signing. Getting a loan approval before hand gives you the privilege to negotiate the total cost of the vehicle. There are many options just look into what is best for you. Hope this helped! God Bless!

Reply by
BluRain13

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That's a great point.  Thanks for the info on the possible prepayment penalty also.  Sounds like I would definitely do well to do some shopping around on loans first.  I am taking a friend along to help keep me on track, but I have hung on to my old car so long to avoid having payments that I fear I might be swayed by a "pretty car" and not pay enough attention to the financials, lol.  

Reply by
BluRain13

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Update: I am so appreciative that you recommended credit union, because I probably would not have tried there first due to my last experience. They financed me through the credit union and my loan was approved in less than 15 minutes!  I danced out the door, lol. Thanks again!

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