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7 Common Car Loans Myths Debunked: By Financial Experts

7 Common Car Loans Myths Debunked: By Financial Experts
Written by Publishing Team

Most people think timing is the key to getting the best deal for a brand new car. But when you ask them about it, some people will tell you the days of the week, while others will tell you a random month. So, what is the correct answer then?

Well, sorry to blow your bubbles, but what we discussed before is nothing but a myth. Hence, you are not getting any definitive answer to this question.

Myths or false assumptions have plagued nearly every industry since its inception in the marketplace. And the car loan sector is no different at all!

To help you stay away from such misconceptions, we have busted some of the prevalent car lending myths throughout this article. Don’t forget to stay with us until the end!

Popular Myths to Avoid About Car Loans

Getting a car loan is a long and tedious procedure. Thus, there is no need to turn the whole thing into a complicated relationship. We hope this section will help you in this regard to some extent.

Myth #1: Providing your Social Security number is a must

Your Social Security number is very necessary if you or a trusted person wants to know your credit history. Hence, in some loan cases, you may have to provide the same while submitting your application.

However, after consulting with SG Lendela, we found that the above statement does not usually apply when obtaining a car loan. But, some lenders may require you to provide your recent bank statements and payment slips.

Myth 2: You can only get a car loan from the dealership

Only car dealers will provide information regarding your favorite car and offer attractive deals on it.

However, if you wish, you can shop with other lenders to get your preferred loan amount easily. Just make sure to do proper research on it before making any move!

Myth 3: Bad credit makes it impossible to get loans

Well, this is simply not true. There are many lenders operating out there who offer auto loans even if you have bad credit.

Besides, many used auto parts (if you are thinking of buying used cars) will also provide you with the same. You don’t have to worry about anything.

Myth 4: A Longer Loan Period Saves Your Money

You will have to pay a small amount of money each month if you have chosen to take out a longer loan. However, since you are making up for a long period, your total payments will be much larger than usual.

Also, car loans usually follow the rules of simple interest loans. Because the longer the money is repaid, the more the total interest will change/increase.

Myth 5: Get a better deal on a rainy day

Whether you believe it or not, this myth was very popular during a certain period. However, needless to say, the statement is also completely wrong.

Usually a car dealer offers deals during many important holidays, such as Christmas Day, January 1st, Memorial Day, etc.

In addition, the timing or date of this will depend on the merchant and his preferences. Hence, if you have a favorite person (for example, a car brand), try to monitor their schedules.

Myth 6: Making a mistake leads to a default on a bad loan

We humans are prone to making mistakes, especially if we are trying something for the first time. Sometimes, it can be very expensive, while in other cases, you can turn things around very quickly. Fortunately, making the wrong decision while choosing a car loan provider falls into the second category.

If you make a mistake during the first attempt, we suggest that you do a little shopping and refinance your loan with better interest. This way, you can avoid the problems of interest rate fluctuations and save your money.

Myth 7: One rejection doesn’t mean more approvals

Typically, each car loan lender tends to have their own criteria for approving a loan application. Hence, just because you reject someone does not mean that everyone will do the same. Also, there are many lenders that can help you with bad credit scores and secure financing to take out a loan.

conclusion

Completing the entire documentation process and obtaining a car loan can be quite confusing. And if you are overwhelmed by misconceptions, things will become more important to you.

Through this article, we have tried to help you debunk some myths to lower your doubts a bit. Hopefully, now, everything will work out for you!

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