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- Joined: Thu Dec 20, 2012 1:42 am
- Location: NJ
[quote="agp"]I have no idea how car loans work, since I have never bought a car on credit before, so I have some questions I was hoping CCFers can answer for me:
1. I have quite a few credit card applications, usually an application round every four months, each time 2-3 credit cards. This will be viewed negatively by many, but is this worse in the eyes of credit unions like Penfed, or big banks like Chase?
If you're overextended on your accounts or close to your limit? Yes.
2. Do you have to determine which dealer you buy from before you apply for a loan? Or is the loan check sent to you?
All you need to know is the amount you're willing to spend, length of the loan & whether it's a new or used car. Once approved the bank will mail a blank check up to your requested amount to your home. Therefore, I would always recommend applying before even stepping foot in the dealership. If you know the exact make & model of car, I would also recommend calling around to see who will give you the best deal. In other words get a quote from dealer A & use it against dealer B & vice versa.
Personally, I have made many deals over the phone just like this without any problems. If a dealer does give you any problems, move on to the next one.
3. Balloon payments? Que?
In a balloon payment if the car your buying is $25,000 and your monthly payments are $250 for the first three years, your final payment or balloon payment will be around $16,000. This is not factoring interest on the loan by the way.
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