auto

It pays to surf for auto loans online

Looking for a no-fuss auto loan with a rock-bottom interest rate? Hop online.

Thanks to a new wave of online offerings, you could land the auto loan you want without setting foot in a bank or credit union or squaring off with the finance manager down at the dealership.

And you've got quite a selection of online loans to choose from. Like E-Loan and Capital One Auto Finance (Formerly PeopleFirst), many banks and credit unions now offer auto loans over the Web. Major banks that allow customers to apply for auto loans online include Chase Manhattan, Wachovia, Wells Fargo, SunTrust, PNC Bank and Union Bank of California.

But the auto loans popping up on the Web are far from equal. Online applications, rates and customer service all vary widely. You'll need to shop carefully. Let's get started.

Better rates, quicker results The biggest things online loans have going for them are low interest rates.

The national average for 48-month new-car loans is 7.52 percent and 8.39 percent for 36-month used-car loans, according to Bankrate.com.

Hop online and you'll find auto loan rates far lower than that. To nab rock-bottom rates, the customer must apply for the loan online and agree to automatic, electronic loan payments. If you apply for a loan by phone, fax or mail, your interest rate could edge up a quarter percent or so. Pass on the automated loan payments and your rate could jump another half percent.

Wherever you finance your auto loan, it's a good idea to ask about interest rate reductions for automatic payments. Here's another tip. When shopping for auto financing, don't overlook the financial institution that handles your mortgage or checking account. Some banks and credit unions offer interest rate discounts to auto loan customers with additional accounts.

While surfing the Web for auto loans, it's important to realize that not all online lenders offer rock-bottom rates. Some banks offer the same interest rates offered in the branch to customers that apply online. So being Web-savvy may not make much of a difference to your auto loan rate.

Watch out for fees. Application fees, paperwork fees, administrative fees, all kinds of fees can turn up on an auto loan contract. Be sure to ask about fees before you apply for an auto loan over the Web.

Another thing that people like about online auto loans is the quick response time. Filling out a five-line application and getting an approval within minutes feels great.

 

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