Auto loan lender refers to the lending institutions whether banks, credit unions, dealerships or online auto loan lender that offer auto loan. An auto loan lender requires the following documents so that you will qualify for an auto financing: Proof of income that can be verified Proof of residence that can be verified Good credit history Valid drivers license Valid title ( in cases of trade in ) Personal references (family and/or friends) “Stips” or additional items such as copies of tax returns, phone bills, bank statements. These additional requirements will depend on your employment status and credit history. An auto loan lender often charges those with bad credits or no credit higher interest rates than the usual rate enjoyed by those with average credits. An auto loan lender often charged auto loan rates based on the consumer’s credit history. The length of time for the auto loan varies. The auto loan lender has the option to allow terms of 36, 48, 60 or 72 months. Shorter loans have lower rates but higher monthly payments than the longer-term loans. Auto loan lenders do not often charge prepayment fees. These fees refer to the charges incur for early payment of the loan. Auto loan lenders often require that the vehicle be insured so as to protect their investment in case of vehicle damage or loss. The amount of insurance coverage required is usually determined by the auto loan lender’s policy and can differ from one auto loan lender to another. Some auto loan lenders especially those online can approve auto loan applications in minutes. Other auto loan lenders could take days depending on the requirements needed. An auto loan lender often has to watch out for the Federal Funds Rate to be able to determine the current auto loan rates. Although there is really no direct correlation between Federal Funds Rate and current auto loan rate but the changes in short-term cost of money do affect the current auto loan rates. What actually fund the auto loan lender’s money are the locally-gathered deposits. The local deposits in the form of time deposits are where the auto loan lenders obtain funds or the ‘cost of obtaining funds’. These costs of fund are the interest you get for time deposits which in turn used by the auto loan lender for the loans. Auto loan lenders need to attract both depositors and borrowers in order to make money. As the auto loan lender’s ‘cost of funds’ increases, the rates on short-term loans also increases. The drifting of rates is the cause why Federal Reserve moves are made from six months to a year to be fully realized in the economy which could contribute to an increase in the current auto loan rates. Since current auto loan rates vary from one auto loan lender to another, you should do some research for the best interest rate before choosing the auto loan lender to approach. Differences in current auto loan rates could be as low as 2% in some areas. The current auto loan rates are subject to change depending on the economic situation, Federal Funds Rate and the lending institutions.
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