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Buying a car is a considerable purchase for many people. The process involves navigating the often-confusing and complex world of auto financing.
This is why it’s essential to have a solid grasp of key details like terms, APR, and refinancing because knowing how these factors impact your loan allows you to negotiate the best possible deal.
At Baton Rouge Telco, we’ve compiled a list of the top auto loan FAQs related to car financing. Read on to learn more as we demystify the auto loan process.
APR is the annual percentage rate on a loan. It represents the total annual cost of borrowing money. APR includes the interest rate and any additional loan fees or costs.
Start by considering your needs and understanding the personal factors influencing your loan options. For example, review your credit report, monthly budget, and whether you are buying a new or used car.
Start by searching for the options that different financial institutions offer. An auto loan calculator will allow you to determine how much you will pay each month. You’ll also be able to compare two different loans to see which offers the best value.
You can now apply for an auto loan online or in person at any Baton Rouge Telco branch. We have locations in Baton Rouge, Hammond, and Denham Springs where we can help you in person with the application process.
For more information, call us at (225) 924-8900 or use our website's live chat feature. Our helpful team members will provide insight into what documents you must have ready when applying.
This is one of the top questions that our members ask. Pre-approval is when you apply for loan approval before you go car shopping. It allows a lender to review your finances ahead of time and determine approved loan amounts and rates.
Car dealerships will often offer you a loan with high-interest rates through a partner company. You can avoid this waste of time and money by getting pre-approved through your credit union. You’ll likely be able to secure lower interest rates right from the start.
Walking into a dealership with a pre-approval in hand shows them you know the best rates you can achieve. As such, dealers are often more willing to negotiate. They understand you have a clear budget and may offer better prices or terms to close the deal quickly.
Baton Rouge Telco offers car loan pre-approvals to our members. It’s free to join our financial family. You’ll only need to deposit $5 into a new savings account to get started.
The best option is to set up automatic payments so you won’t accidentally forget to make one. Many financial institutions have multiple options for payment. For example, Baton Rouge Telco accepts online payments via phone, mail, or in person.
Refinancing is when you use a new car loan to pay off your current car loan. People often refinance their car loans for lower interest rates or monthly payments. If you have improved your credit score since you initially took out your loan, you could potentially now get a better APY.
However, it’s important to factor any refinancing fees into the total cost of the loan. Analyzing these numbers can help you decide if refinancing is a good option. Baton Rouge Telco allows members to save on loans through our loyalty discounts. For example, the refinanced loan APR can decrease by up to 1%.
You have financing options if your leasing company allows you to purchase the car after the lease ends. However, knowing your lease's terms and conditions beforehand is essential.
Make sure to discuss this with your leasing company and check your paperwork. Baton Rouge Telco offers lease buyout options, and you can learn more by talking with a representative.
When you finance a car, the lender (known as a “lien holder”) will retain legal ownership of the car’s title until you repay the loan. If you default, they can legally repossess your car because it acts as collateral for the unpaid balance.
You will receive the title to your car soon after you’ve paid off your loan in full. In Louisiana, it typically takes 2-4 weeks to receive the title from the DMV.
Some lenders allow you to include insurance and registration costs in your auto loan. This will enable you to roll these expenses into your loan amount and pay them off along with the car over time. However, it might increase your overall loan amount and the interest you pay.
Your credit score significantly impacts the auto loan rate the lender offers you. A higher credit score usually means lower interest rates because lenders see you as a lower-risk borrower. Conversely, a lower credit score might result in higher rates due to perceived increased risk.
Missing a payment on your auto loan can have several consequences. You may initially incur late fees, and your lender may report the late payment to credit bureaus.
A late payment on your credit report will negatively impact your score. Continued missed payments can lead to severe consequences, like loan default or repossession.
Whether you'll face penalties for early auto loan payoff depends on your lender. Some lenders add prepayment penalties to the payoff amount to compensate for their lost interest. Always check your loan agreement for prepayment terms before paying off your loan early.
The time it takes to get approval for an auto loan varies. Depending on the lender and your financial situation, it can be as quick as the same day or take a few days. Having your documents ready and a good credit history (and score) can often speed up the process.
At Baton Rouge Telco, we’re excited that you’ve decided to start the process of purchasing a vehicle! Click the link below to check out our auto loans webpage and get started. You can view our current rates and fill out an application online. If you have any questions, click the chat bubble in the lower right-hand corner of this web page to speak with a live banker.
We look forward to helping you get behind the wheel of a car with a loan that fits your budget and lifestyle!
Federally insured by NCUA. Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government – National Credit Union Administration (NCUA), a U.S. Government Agency.
