If you have the cash in hand, you can often negotiate a great deal on a new or used car. However, if you intend to finance the purchase, you should know how to get the most from a car loan before making the purchase. Discount Auto Sales, a respected used car dealership in Mountain Home, AR, reveals three important facts about auto loans below. This information should help you get a good rate and favorable terms.

5 Ways to Improve the Terms of an Auto Loan

1. Get Pre-Approved First

Before you go shopping for a car, you should get pre-approved for a loan by one or more lenders. This lets you know how much you can afford to spend and helps simplify your search. It will also help you avoid planning road trips in that fancy sports car or luxury sedan you cannot afford.

2. Understand Your Credit History

The better your credit rating, the more luck you'll have finding a lender to finance the purchase. Moreover, in many cases, applicants with a stellar credit score receive preferential treatment, including lower interest rates and smaller down payment requirements. If you can improve your score before purchasing, try to do so.

3. Shop Around

Consider applying to several lenders for credit instead of taking the first available offer. Not all finance companies offer the same terms on new or used car loans, and you might be able to find a lower rate or more favorable repayment schedule elsewhere.

4. Submit All Applications Within 14 Days

However, if you submit multiple credit applications, the activity will cause a dip in your credit score. Lenders simply don't like unpredictability. However, if you submit all applications within a 14-day period, the multiple credit checks will appear on your report as a single event. This minimizes the hit your credit rating takes.

5. Avoid Prepayment Penalties

It normally makes good financial sense to repay your loan early to minimize interest payments. However, some car loans penalize prepayment. This means you cannot repay the loan early without paying an additional fee. For the greatest flexibility, avoid loans that require prepayment penalties.

When shopping for a new or used car, keep the facts above in mind. To view a wide selection of foreign and domestic cars for sale, stop by Discount Auto Sales in Baxter County. They maintain a large inventory, and their sales team is helpful without being pushy. Visit their website for directions and stop in for a test drive, or call (870) 425-1775 to inquire about vehicle availability.