Financing your new or used Mazda is a big thing. If you do it right, you can feel comfortable with your car payment. If you don’t, financing can add stress to your life.
You probably do not have enough money in the bank to pay cash for your Mazda. (Afterall, buying a car is the second biggest purchase, next to a house, that most people will make in their lifetime.) So you are looking at some type of loan to purchase your Mazda.
Most likely, you will pay a down payment of some kind. This can come in the form of cash or trading in your present car.
Obtaining the right financing for your Mazda can save you hundreds of dollars. Depending on how much you borrow, the difference between 6.5% for a three-year loan and 6.85% for a five-year loan can be $30 or $40 a month,. Keeping your interest rate low is something you will very much want to do.
Put your finances in order before applying for credit for your Mazda puts you in the best standing before you go into the transaction. The following are a few tips.
Get a copy of your credit report. For a nominal fee, you can obtain one online from a number of credit reporting agencies. After reviewing the report, clear up any mistakes you see. Then pay off debts or make arrangements to do so. This will boost your credit score, which is one of the prime factors that a bank or car financing company uses to determine how much they will lend you, at what interest rate, and thus how much your payments will be. If you do not have a very good credit record, in other words if you have been delinquent paying your bills or have large outstanding debts, you can still purchase your Mazda. But you will most likely pay a higher interest rate.
Used car loans are higher than new car loans – it seems unfair, but that is just the way it is. The best thing to do is shop around. Rates vary, so check you local banks and credit unions. If you are buying from a new or used car dealer, inquire about their rates. Deal with only reputable, honest lenders. Ask if there are any penalties for paying your loan off early. Since many lenders do not charge for this, you do not want to end up spending money that you don’t have to spend.
The longer you require to pay off the loan, the more interest you will pay. On the other hand, you will spend less on interest if you pay your loan off in a short time. What are typical rates? When you buy your Mazda from a new or used car dealer, you will pay 6.5% interest on the money you borrow for three years, 6.85% for five years and 7.39% for a six-years. When you buy from a private party (this is called a person–to-person loan), rates are approximately 8.25% interest for three years, 8.45% for five years and 9.25% for a six-years.
Prior to applying for loan, go to a lender’s website to find out what interest rates they are offering. By keying in the interest rate you think you might pay, for how long you want to borrow the money, and how much you want to borrow, you can calculate your loan payment. This can help you plan your budget.
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