Get your financing before you buy.

As is the case with many products, you can get your car loan online. In fact, getting a car loan online may have some real virtues compared to walking into a bank. While you are looking at cars, you should also be loan shopping. Having your financing first can make buying a car easier and even help guide your search. But also like any product, it pays to have a plan before you shop. Here’s how to secure your auto financing the smart way.

Check Reputations

By the nature of any loan, when you borrow you will be in business with whomever you borrow from for at least a few years. So before you sign on the dotted line, or otherwise follow up with an online lender, do a little research. Look for current customers and reviews, and find out what they like and dislike about the lender. This should be especially true of smaller loan agencies of which you might not have heard; look up who they are and whether you want to be in business with them.

Use Calculators And Get Quotes

The first step for any big expense is to comparison shop. Any loan has three key pieces. The principal is the total amount you are going to borrow. The interest rate is how much you are going to pay above the principal on your loan. And the term is how many payments your loan has been divided into, usually expressed in months. For example, a three year loan would be written as 36 months.

Ideally, the lower each part is, the better. Do not forget you will also have incidental expenses like excise taxes to cover when you buy a car. So, ask for quotes, use online loan calculators, and get a sense of what each financial institution offers you.

Why sign with a dealership if you can get a better loan elsewhere?

Compare And Contrast

Once you have gotten a few banks together and have quotes from them, it is time to crunch the numbers. It is a good idea to take each loan and figure out exactly how much you will be paying every month, how much interest you will pay over the life of the loan, and how it fits in your budget. You should also have a rough idea of what the market value of your car will be over time, in part so you know whether a loan will put you “underwater,” which occurs when you are paying more for the car than it is worth.

Do not simply run the numbers, though. Take a good hard look at the fine print too. Can you make payments early? Are there penalties if you miss a payment? Can you argue for lower interest rates or other perks at any point in the loan? Can you refinance? All of this is good to keep in mind when choosing a loan.

Be Secure

Finally, make a point of security. Keep in mind you are sharing a lot of personal details here, including data that could be used to steal your identity. Always make sure you are using a secure internet connection. Never fill out or send paperwork via a non-secured public connection; always check to ensure you are using encrypted and protected services, which will go a long way toward keeping your information safe.

For more about buying a car, or finding the right one, start with the research from CarFoundMe.