Find the Best Car Loans in Cleveland, OH

How to get an auto loan in Cleveland

While many people wait to arrange financing until after they’ve found they want to buy, there are many advantages to setting up a loan from a bank, credit union or online lender before ever stepping on a car lot in Cleveland. Getting pre-approved for a loan:

• Saves time at the dealership
• Determines your budget before shopping
• Gives you additional leverage when negotiating price
• Lets you shop at multiple dealers

Applying for auto loans in Cleveland

Lenders in Cleveland have varying requirements to qualify for car loans, but most use the same financial information to decide the terms. Your credit score is the most important factor for qualifying for a car loan with a low annual percentage rate (APR).

Cleveland residents had an average credit score of 680 in 2017, slightly exceeding the national average of 673. Borrowers with excellent credit receive APRs between 3 and 5 percent, while borrowers with poor credit qualify for loans with interest rates in the low-to-mid teens.

Besides APR, other things to consider when comparing loan offers are:

• Loan term: This is the amount of time you have to pay off your car loan, usually between 36 and 72 months. The longer the term, the cheaper your monthly payment, but the loan accrues more interest during this time and costs more in the long run.
• Down payment: You may need a larger down payment if you have poor credit. Paying more upfront reduces your monthly payments or allows you to pay your car off over a shorter term.
• Taxes and fees: In addition to the price of the car and the APR, you may have to have pay state sales tax, a documentation fee and charges from the dealer.
• Prepayment penalties: Find a lender who allows you to pay your loan off early if you choose. Some lenders charge penalty fees if you pay off your loan before the end of the term.

Getting a car loan with bad credit in Cleveland

There are ways to obtain better rates on a car loan if you have poor credit, such as asking a trusted relative or friend if they will co-sign your loan. This alleviates some risk for the lender, but your co-signer is responsible for the loan if you default. Some institutions, such as online lenders, work with those who have less than desirable credit scores.