How to Get Prequalified for Auto Financing

What is an Automobile? An automobile is basically a wheeled lightweight motor vehicle intended for transportation. Most definitions of automobiles state that they are wheeled vehicles, seat between eight and sixteen people, transport goods rather than individuals, and primarily operate on paved roads rather than dirt. However, there are also some models of automobiles that can be classified as mini-motorcycles or recreational vehicles. The modern definition of an automobile as the one with four wheels and a passenger classifications begin from this basic model.

The modern days we live in is marked with a growing number of car accidents, and this has lead to an increase in the demand for auto financing companies. This is due to the fact that auto loans can be availed at low interest rates with affordable repayment plan schemes. There are two types of auto financing companies – one is the mainstream financial institution, and the other is the alternative finance company. The mainstream lenders offer secured and unsecured auto loans. A secured auto loan is one where the borrower pledges a certain amount of his property as collateral against the loan amount and in case of default the lender repossess the pledged asset.

On the other hand, unsecured car finance is a type of loan where the borrower does not have to pledge anything as security. These are very easy to acquire, as there is no need of collateral evaluation. However, the interest rates applicable in this case are a bit higher as compared to secured loans. The borrower can also get good car finance deals online. There are various car finance websites that offer free no obligation auto quotes, which enable you to compare different offers on the market and select the best one suited to your needs and budget. The best thing about these websites is that they are not restricted to any particular car finance company, so you can easily apply from different companies, without any sort of obligations.

A direct lender is a lending company that directly lends funds to the borrower. They are mostly banks, but there are some direct lending institutions that specialize in providing loans to borrowers with poor credit history. Such financing companies allow borrowers to access loans even if they have CCJ default or bankruptcy cases against their name. Some good examples of direct lending companies are GMAC, Bank of America and CitiBank.

Borrowers who need financing for buying a new car should first look for good dealerships that offer low interest rates. This will help them get prequalified at the same time, which will save them the trouble of applying again. After getting prequalified at a dealership, the borrower can apply for a loan from the dealer’s financing arm.

Another way of getting prequalified at multiple dealerships is by looking for lenders on the Internet. There are various websites that allow borrowers to apply for a preapproved loan on the Internet. This option is good for those who want to apply at a number of lenders because there are no application costs involved. Some websites offer free quotes on APR and fixed interest rates. In order to get the best deal, however, borrowers should shop around among several online auto loan brokers.

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