Why you should go for an online car loan

A few decades ago, the only way for a person to get a loan was to visit a bank and talk to a loan officer. They had to fill out a ton of paperwork and have their application evaluated by the lending institution staff. This was a time-consuming process that produced uncertain results.

Technology has changed things. Most lending institutions have an online presence, making learning about and applying for car loans easier. There are several reasons why you should go for an online car loan.

The Benefits of Online Car Loans

Getting a loan from an online lender can be a great opportunity for people who need to get a loan quickly or for people who have poor credit. Online auto loans offer competitive interest rates. This is true whether you are looking to get a loan for a new vehicle or the best auto loan refinance rates.

Online auto loan lenders may have lower interest rates than traditional banks. For example, a potential car buyer with good credit could find that the APR for a 60-month loan on a new vehicle is up to two percentage points higher with a traditional bank compared to an online lender. Two percentage points may seem like nothing. However, when talking about purchasing a car worth tens of thousands of dollars, it adds up.

For example, a $25,000 vehicle loan with 3.5 percent interest rates and a 60-month term means a monthly payment of $455. The same loan with a five percent interest rate has a monthly payment of $472. Over the course of five years, a person would spend over $1,000 more with the higher interest loan.

Getting a Loan Approved Online Is Fast

Online approvals are fast. The applicant knows almost immediately if they are going to be approved for the loan or not. Some lending entities can even approve car loans in a couple of hours.

The speed of approval makes getting a car loan convenient. A person can fill out the application online and sit in the comfort of their home while they wait for a speedy response. According to Lantern by SoFi, one of the benefits of getting an online loan is that a person can “compare auto loan refi rates selected just for them.”

Avoid Dealer Arranged Financing

When you go to a dealership with a preapproved financing deal, you can avoid dealer arranged financing. Most car buyers will have their financing arranged by the dealership. But since they don’t have a preapproved loan in their pocket, they will likely overpay for their car loan.

Selling automobiles is just one way a dealership makes money. Much of their profits come from their service department arranging auto loans for buyers. When a person walks in with a preapproved loan, the car dealer has to meet or even beat both the interest rate and terms of the preapproved loan if they want a customer’s business.

Online Loans Are Easy

Getting a new loan or refinancing an existing loan online is simple. The approval is fast, and you have more lenders to choose from.