truck loans and financing get a good truck loan, interest rate and financing package
Truck Loans and Financing
Truck loans and financing can be the trickiest part of purchasing a truck, especially if you are buying a used truck. Financing is typically where many dealerships make extra profits at your expense, often through special add-ons, higher rates, or special dealer fees, they pass on to you at inflated costs. Many of the larger truck dealers offer good truck financing in-house and should at least be compared and considered. They often have such a large volume of applications that are specially targeted to trucks, that they can compete with typical banks and credit unions.
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Follow this process - and you will come out ahead. First, settle on a truck that you want without discussing financing, settle on a price, agree to a trade in value (if you have one), then tell the salesman you are willing to discuss any financing options they have but do NOT tell them or show them the terms you have already |
gotten approval for from your bank or other truck loan financing source. The ads on this page are from highly reputable truck financing institutions that may be of value to you in at least getting a free quote. Spend a little time now seeing what they offer BEFORE you visit the truck lot and get a truck loan.
Truck loan interest rate - Your
interest rate will vary because it depends on many factors, which include your
loan total, expected down payment, credit profile and the value of your truck.
Most companies will want to process your truck loan application BEFORE discussing
terms. This is normal and since most companies can complete your application in
less than an hour, it shouldn't be an issue.
Down payment - Many
truck loans require a 25% down payment. People with great credit however often
qualify for special programs that have no minimum down requirements. Your credit
score will determine this.
Minimum truck loan amount - I rarely
see tractor trailer loans processed in amounts less than $26,000. The value of
the truck is just not worth the risk to the bank if they have to repossess it.
It costs the bank the same amount to repo your 10 year old $26,000 Mack as it
does to repo a brand new $100,000 Sterling. With the Sterling they have something
that is easy to sell. With the Mack, they do not.
Loan term length
- most companies will not loan on an truck for less than 3 years. Most larger
companies will loan for as long as 6 years since they often see the bigger trucks
as investments in a business.
Truck loan application fee - many
companies charge to find out if they can loan you money. Do not pay it! INSIST
on a free application approval process. If they are not willing to take this small
risk on you then they are less likely to be perfect to work with. Don't waste
your time.
Truck makes that can be financed - Many banks only
want to loan on large, expensive trucks. If you are buying an old day cab white
or stretch Peterbilt show truck or some other oddball coach, or conversion, ask
up front, before you get into the lengthy application, if they loan on that kind
of vehicle. If they just stare at you when you say "big rig", or if
filling out an online application there is not a "drop down" box that
contains the word "Freightliner" for example, for vehicle make, then
move on. Interested in a coach
or bus loan, get help from Bus For Sale Guide.
Financing older
trucks - It can be quite difficult without perfect credit to finance an older
truck. Some companies will go back 6 years on a real solid truck with a serious
legitimate survey or appraisal on it. Other companies will not touch anything
older than 4 years regardless of value or credit score. The point is ask FIRST
if they loan on your year truck so you don't waste time filling out an application
for an truck loan that will lead nowhere.
Credit score - the better
companies that will finance you on an truck loan without up front application
fees or credit check fees, who have good interest rates, and can get it done in
an hour or two, will require a credit score of 600 - 640 and sometimes higher.
If you don't have a credit score in that range you will need to be more flexible
in your approach and in the interest rates you will be willing to accept.
Getting an truck loan AFTER you bought the truck - Some banks have
a cash recapture program that allows you to buy a truck using your cash, like
when you stumble on a great incredible deal or distress sale and need to by it
that day, then they give you the loan later and take possession of your title
until payoff. This can typically be done up to 4-6 months after the truck purchase.
Once you have the truck you might want to take a USA Holiday
Truck loan calculation - Make sure the loan you get is a simple interest loan. This way you only pay interest on the principal you owe, and that amount gets reduced every payment you make on the truck loan and financing.
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