Do you need to purchase a vehicle, but don't have the cash on hand to do so? You'll likely need to get an auto loan in order to finance this large purchase. Your goal will be to get the best deal on your loan, which is why it helps to follow these tips to learn how to do it.

Clear Up Your Credit History

Before you apply for a loan, it is a good idea to pull your credit report and look at your credit history from all three credit reporting agencies. You can pull a free report from each of them every year, so there is no harm in doing so. You may be surprised to see discrepancies in these reports that can have an impact on your future loan. This includes debts that have been paid off and not yet removed or incorrect debts that you didn't know that you had. Take the time to clear up these items before moving forward with the loan, since they have a direct impact on how much you pay in interest.

Pick A Short Loan When Possible

You may be tempted to go with a long-term loan that divides the payments up over many years, which results in low monthly payments. However, those loans often come with a higher interest rate, which will cause you to pay more money over the length of the loan. Since auto loans are relatively short as it is, you won't be able to pay the loan off early without paying some big fees for doing so.

Take a look at your budget and see how much you can afford when it comes to the monthly car payment. Us this as your guide to determine how short of a loan you can get. The lender is going to want to make as much money off the loan as possible, so do not be surprised if they try to push you towards a longer term to encourage you to have a more manageable payment.

Provide A Large Down Payment

It can also be tempting to take advantage of loans with promises of not needing to put any money down. However, the more cash you can pay up front will lead to less money that needs to be borrowed, which means less interest paid over time. If you have enough cash for a 20% down payment, always provide it so you can limit how much you pay in interest.

For more information, contact your local credit union auto lending services.