If you’re interested in buying a new car, you’ll probably consider taking out a loan. But your car loan rate can have a massive impact on your monthly payments—as well as the total cost of the car over your lifetime. It’s a major decision that’s worth considering in detail.

So what steps can you take to get a better car loan rate?

Shop Around

One of the best things you can do is simply shop around. There are many different Auto Loan Lending options available to you and some will offer objectively better deals than others, based on your credit history, the amount you’re borrowing, and other factors; go here for more information. If you’re working with a car dealership, they’ll probably extend in-house financing to you, but oftentimes, these deals aren’t the best—you could end up paying a higher interest rate or dealing with less favorable terms.

Instead, spend some time looking at car loan rates online and talking to your local lenders. You’ll get a high-level view of the types of loans you may qualify for, and the interest rates you might pay, and you can also look for different options or the use of emergency loans which can also be a good option.

Improve Your Credit Score

Generally speaking, the higher your credit score is, the lower the interest rates you’re going to see offered by lenders. Your FICO credit score is a measure of your financial trustworthiness, and it rises and falls with your financial activity. For example, if you miss payments frequently or if you’re dealing with a massive amount of debt, your credit score will be lower—and your loan rate terms will be less favorable. So better check out this article for some helpful options!

You can increase your credit score in several ways, including:

• Reducing debt. Pay off your existing debts whenever you can. The higher your debt to income ratio is, the less likely you’re going to qualify for the best loan a provider has to offer. This will also help you balance your monthly budget, so you can better afford the car you want.
• Making payments consistently. It’s important to make payments consistently for everything—including your credit cards, your existing loans, and even your utility bills. Paying in full and on time can eventually lift your credit score, especially if you have an unreliable history.
• Avoiding new credit (and keeping old accounts open). Your credit score also factors your credit “mix” into the equation. The older your existing accounts are, the better, but if you try to open a new account, it could work against you. Try to preserve the mix you currently have if you’re interested in getting a loan in the near future.

It can take a long time to increase your credit score, so these aren’t strategies you can pull out if you want to get a loan in the next week. However, with time and patience, you can put yourself in a better financial position and earn better offers for yourself.

Save Up a Bigger Down Payment

Though this may not have a direct impact on improving your car loan interest rate, it can help you minimize the amount of money you need to borrow—and ultimately reduce how much interest you pay throughout the duration of the loan. Spend a few months before your purchase setting aside extra money for the down payment on your vehicle; you’ll have to borrow less principal, and your monthly payments will be much lower.

Negotiate

Lenders aren’t required to offer you the best possible rate that you qualify for; instead, they may offer you a higher interest rate on the loan to see if you’ll accept it. Consider negotiating with the lenders from car loans nz to get a lower interest rate, or other more favorable terms. You might be surprised at what you can get by asking.

Terms and Other Factors

Your interest rate is probably one of your biggest deciding factors when choosing a loan, since it has such a big impact on your monthly payments and the lifetime cost of your vehicle. However, it’s not the only factor to consider when choosing a lender or hunting for a better deal. You’ll also want to consider whether this interest rate is fixed or variable; generally speaking, fixed interest rate loans are superior, since they can’t face a rate increase in the future. Additionally, think about the terms of your loan; with shorter loans, you’ll see higher monthly payments, but you’ll also pay less in interest over the course of your loan. If you can afford a shorter-term loan, you should probably get it. Visit wecu.com/personal-banking/vehicle-loans/ to get a lower interest rate on your car loan.

With a better car loan in place, you’ll pay off your car faster—and with less total interest paid to your lender. Follow these steps, and you’ll be able to find a near-perfect loan for your conditions, regardless of the car you’re hoping to buy.