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 How to get the best online auto loan
  Cash back financing or low interest rate car loan?
By the EchoBay Loans Expert
 How to get the best online auto loan
Dear EchoBay Expert: After doing a little research, I've decided an online car loan is the way to go to pay for a used Ford Explorer I'm going to purchase. What are some recommendations that will help me to get the best online auto loan?

Dear Loyal Reader: The decision to acquire your used car loan online is a wise one. Not only do online lenders' interest rates tend to be lower, but the fact that they don't usually charge application fees or require a down payment are added incentives.

To get the best online car loan possible, make sure you work with a lender that specializes in your specific needs. If you have bad credit, working with a lender who's experienced in dealing with credit problems can save you a lot of headaches. On the other hand, if your credit is spotless, you'll want to work with a lender who specializes in "A" credit loans as they tend to offer lower interest rates.

Also make sure that you order a copy of your credit report prior to applying for your loan. Since blemishes on your credit report can equate to higher interest rates, you'll want to make sure the information on your credit report is accurate.

Of course, one of the most important steps towards getting a great online auto loan is to shop around. Apply with a number of different lenders, but make sure you're applying with the actual loan originators and not a middle man who is going to mark up your costs in order to run a profit.

When you choose which lender you'll be borrowing from, you'll have the security of having a locked-in loan rate and you'll have added negotiating power when it's time to make your purchase at the dealership, which can make the entire used car purchase process a whole lot easier.

 Cash back financing or low interest rate car loan?
Dear EchoBay Expert: The Acura dealer where I'll be purchasing my TL is offering a special cash back financing deal this month and also a low interest rate loan offer. I'd like to know which deal would save me the most money. Both offers are for a $22,000 loan that I'd take out for 48 months. The cash back deal has a 5.25% interest rate and a $3,000 rebate. The low interest rate loan offer comes with a 1.7% interest rate and no cash back. Thanks for answering.

Dear Loyal Reader: This is a simple calculation. On the 5.25% loan with a rebate, your payment will be $509 and you will pay $2,438 in interest. With the low interest rate car loan of 1.7%, your payment will be $474 and you will pay $772 in interest.

The higher interest rate loan with the rebate is a much better deal since your total payments with receiving the $3,000 credit are $1,333 less than what you'd pay for the car with the lower interest rate loan that does not have a rebate. As long as you can afford the extra $35 a month in auto payments, it is the best way to go.

In a lot of cases, there is not an incredible amount of difference between the low interest rate car loans versus the higher interest rate car loans with a rebate. But it always pays to do the math as this situation shows.

No matter how much it appears you can save by choosing one loan over the other, be sure you can comfortably afford the car payments of the car you choose. Being able to tell people you saved $1,333 won't do you much good when they are repossessing your car because you couldn't afford the payment.

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