If you’ve been taking public transportation or have an unreliable vehicle, it’s exciting when you're ready to get a new or used car. Even if you don’t have enough cash saved, an auto loan can provide the financing you need to get behind the wheel. Hawaiian Tel Federal Credit Union is the financial institution of choice when it comes to affordability, excellent interest rates, and budget-friendly terms. To help you know what to expect when you apply for an auto loan under different circumstances, they explain how the arrangement works.

4 Basics of Getting an Auto Loan

Auto Loan Contract

An auto loan is essentially a signed contract between you and a lender that provides details about the amount of money you’re borrowing to purchase a vehicle and terms for repayment. The contract outlines the total cost, interest rate, monthly payment amount, and term of the loan. It also explains the consequences of late payments and defaults.

Buying a New Car

Before purchasing a new car, one good starting point is knowing the amount of financing you can afford. This is known as the prequalification process. A credit union representative will gladly provide a figure based on your credit history, debt payment history, and other factors. Once you know the loan amount for which you qualify, you can start shopping for a new car within that financial range.

Purchasing a Used Vehicle

Some people prefer to buy a high-quality pre-owned vehicle. A loan for a used car works nearly the same way as one for a new vehicle; all the payment terms are outlined in the contract. One key difference between a used car loan and new car loan is the type of insurance you need. Some lenders might require the loan applicant to purchase only minimum coverage for a used vehicle but comprehensive and collision insurance for a new car.

Refinancing a Car

The process of refinancing involves reconfiguring an existing auto loan to achieve a lower interest rate. Borrowers tend to refinance to reduce their monthly payment over a long term. Lenders will review the applicant’s credit history and previous car payment records to determine whether refinancing is an option.

Hawaiian Tel Federal Credit Union makes it easy to apply for an auto loan. From prequalifying to arranging a loan for a vehicle at a local dealership, Hawaii’s premier financial institution will find a deal that works with your budget. If you want to refinance or are wondering about the latest auto loan rates, a friendly staff member will be happy to assist you.

Experience the difference of working with Hawaiian Tel Federal Credit Union to get your ideal auto loan. This credit union has branches throughout Oahu to help with all your personal banking needs, from savings accounts to mortgage loans. To learn more about their services and find your nearest location, visit their website or call them on Oahu at (808) 832-8700 or toll-free at (800) 272-5255.