Personal Car LoanSix Reasons Online Lenders Beat Banks for Better Car Loans

Six Reasons Online Lenders Beat Banks for Better Car Loans

October 26, 2014

If you’re looking for an alternative to your local car dealership for an auto loan, it can be tempting to go to the bank you normally work with. This can be a good option, as it’s convenient to have your loan with the same bank where you have your credit card, checking account, and savings account. But if you don’t shop around online first, you could be missing out on a great deal. Here are a few reasons you should consider going with an online lender.

The rates are lower

Online lenders often don’t have brick-and-mortar branches, and all the expenses that go along with that. Because their overhead is lower, they can sometimes offer lower interest rates on car loans than you’d find with your local bank. This isn’t true with all online lenders, but it’s true enough of the time that it’s worth at least getting a quote from one to make sure your local bank is giving  you a good deal.

The quotes are quicker

Some banks will give you lightning-fast quotes online, just like an online lender will. But this isn’t always the case. Online lenders know that people looking for loans online want quick answers and they’ll often give you a quote in minutes after you fill in an online form.

It’s easier to shop around

Because getting a quote is so fast and easy, you don’t have to call around to different banks and wait days for a loan approval. It’s not hard to check in with several different lenders to see who can give you the best rates. Shopping around for a loan doesn’t damage your credit, and it can lead to a much better interest rate when you finally do make a choice.

Online lenders are great with security

You might think that an online lender would be more of a security risk than a brick-and-mortar bank. That’s not necessarily true. Many brick-and-mortar banks are getting into online banking these days, but not all of them are as familiar with online security measures as online lenders are. Online lenders know that their businesses live and die by their ability to keep their customers’ data secure, and many of them have stringent security measures in place.

Online lenders are more flexible

Since the global economic crisis of 2008, it’s been more difficult for people with less-than-perfect credit histories to get many different kinds of loans, including auto loans. Online lenders can often be more flexible about who they lend to than brick-and-mortar banks. There are several reasons for this, one being that their reduced overhead costs means they have the ability to take on some riskier borrowers. In addition, they often have the latitude to offer better interest rates to these types of borrowers than traditional banks do.

You get choices

Many online lending companies partner with large and well-known banks and financial companies to get you the best rates. Look for an online lender that has partnerships with brick-and-mortar companies and can search a wide database of options in order to get you the best rate possible.

If you’re in the market for a car loan, you have a few choices. You can go with the dealership, you can work with the bank you normally use or you can go online to find the best rates. It’s definitely worth it to talk to a few online lenders before making a decision in order to determine the best rates possible. Online lenders can save you time and money over other options and getting pre-approval can give you bargaining leverage over a dealer. Shop around for a loan online, and you’re more likely to get a good interest rate – no matter your credit.