When you purchase a car from a Cadillac dealer in Channahon, there is a good chance that you will do so with an auto loan. As with any other type of loan, the lender will likely ask that you repay the principal with interest. What are some of the factors used to determine your interest rate?
What Is Your Credit Score?
As a general rule, individuals with a credit score over 700 will tend to get the lowest interest rates on auto loans. However, it may still be possible to get a relatively low rate if your credit score is over 600 in addition to a steady income or sufficient assets. A Cadillac dealer in Channahon may be able to pair you with a bank or other financial institution that works with customers regardless of their credit score.
Are You Creditworthy?
Having a good credit score doesn’t necessarily mean that a lender will feel comfortable loaning you thousands of dollars. For instance, if you are self-employed, have an unpredictable income or have a high debt-to-income (DTI) ratio, it could be harder to repay a car loan in a timely manner. If you are approved for a loan, the interest rate could be higher because of the additional risk a bank believes it is taking.
A Cosigner Could Reduce a Lender’s Risk
Most auto lenders will allow you to add a cosigner to your loan. The cosigner agrees to be responsible for the loan if you miss a payment or decide to default on the loan completely. It is important that a cosigner understands that the debt will appear on their credit report. This could have an impact on his or her ability to get credit in the future.
If you are in the market for a new or used car, visit Hawk Cadillac of Joliet.