Online Car Loan: The Pros & Cons
In today's connected world, you can do almost anything online, including getting a car loan. Many often wonder if turning to an online car loan is the best option.
Getting an online car loan boasts many conveniences, including doing so from anywhere in the world and having access to more lenders. Still, you must consider the pros and cons before making any significant financial decisions.
If you're considering an online car loan, keep reading to learn about the advantages and disadvantages of going down this route.
Pros Of Getting An Online Car Loan
Convenient Application Process
As with anything you do online, it's more convenient.
When applying for a car loan online, you can do it anywhere that’s convenient for you, whether that’s in your home while lying in bed, in your office on your lunch break, or on vacation at the beach. When you don't have to go into a dealership, credit union, or other lending offices to secure financing, you can take advantage of this benefit.
Additionally, since the internet doesn't have office hours, you can apply anytime, day or night.
Fast Application Process
Along with being more convenient, the process of completing an application online is often quicker than submitting an application on paper. Lenders want to keep it simple, since it's a DIY process, so there's no confusion along the way.
Also, when data is automatically processed through their system, it often allows you to get results within minutes of clicking the submit button.
Secure A Preapproval
Getting preapproval for a vehicle loan is a great way to ensure that you get the best terms available. By getting a preapproval, you already have financing secured when you go to the dealership to purchase your vehicle and you know exactly how much you can afford and what your interest rate and loan term will be.
A pre-approval also gives you more leverage at the dealership. Instead of worrying about financing, all you have to do is find the right vehicle at the best price.
Cons Of An Online Car Loan
While you will find many benefits to getting an online car loan, it's also important to point out the things that might not be as beneficial.
Here are some of the top disadvantages to getting a car loan online.
It's A DIY Process
If you prefer having someone with you every step of the process, getting an online car loan might not be the best choice. This is because you're generally expected to complete the process on your own.
Although you can go to a local branch or call and speak to a customer service representative, there's more of an expectation of independence and automation with an online car loan.
You Don’t have An Opportunity To Explain Past Credit Issues
Online applications don’t usually offer you an opportunity to explain why your credit score may be low. WIthout an explanation your loan application may be denied.
Applying in person gives you an opportunity to tell the lender why you missed some payments in the past. Bad things like divorce, layoffs, and illness happen to good people causing their credit scores to go down.
WIth an online application, you do not have a chance to tell your side of the story.
You Can't Secure Manufacturer Financing Deals
Manufacturers will sometimes offer special financing on new vehicles with interest rates as low as 0% for a set period if you have excellent credit. These offers are only available at dealerships that sell new cars, so with an online car loan, you bypass any of these potential savings.
You Must Do Your Research On Lenders
Most online car loan lenders have your best interest in mind, but others don't.
You can secure an online car loan at most of the banks, credit unions, and financial institutions you're familiar with, but you'll also come across some that you don't know or that don't have a strong reputation.
Do your due diligence when getting an online car loan. Otherwise, you could find yourself with a loan you don't want or stuck with a lender that doesn't have your best interest in mind.
Is An Online Car Loan Right For You?
Everyone has their preferences. You may find that getting an online car loan is the best option for you, or that you prefer to go with dealership financing or complete the process at a local branch.
Ultimately, the goal is to make the decision that best meets your financial needs so you can secure financing and find your next vehicle.
If you enjoy the convenience, speed, and preapproval process associated with an online car loan, then we invite you to learn more about getting an auto loan from Advantage Financial FCU.