There are plenty of truck loans out there, but finding the best one takes some research. Of course, your local truck dealer is an obvious place to start, although there are also plenty of online resources, including sites that compare different loan options, saving you time and making the process easier.
Your credit score makes a big difference to the interest rate that will be offered to you on a truck loan; even a small difference in your score can mean higher monthly payments and repaying a larger total amount over the term of the loan. There are various lenders that specialise in car and truck loans for those with bad credit, but it’s worth trying to boost your credit score before even applying for a truck loan, if possible.
It’s also important to figure out your budget and what you can afford in terms of a truck and the payments. In addition to the interest rate, there are other factors to consider; most dealers will require a down payment of at least several hundred dollars, although the more you put down, the less you’ll end up paying each month. Many experts recommend a down payment of at least 15 percent of the total truck price.
And the length, or term of the loan is also a factor; payments are lower when spread over a five or six year term, although in the long run you will end up paying more. A shorter term means higher monthly payments, but it will take less time to own the truck outright and it can also prevent you from owing more on the truck than it’s actually worth.
Negotiating with your dealer is not only acceptable, it can be an effective way of keeping the cost of the truck down. Most dealers want to sell trucks instead of having them take up space on the lot and the finance department often has the authority to make a deal or match a competitor’s offer, especially if it’s towards the end of the year and they want to get rid of as many trucks as possible.