Auto Loan Brokers vs Lenders
If you are in the market to buy a new car, there are several options you can tap into to make the process easier. Aside from searching for auto loans online, consumers can locate auto loans either directly from a lender or from an auto loan broker.
Auto Loan Lenders
An auto lender is a bank or financial institution that will agree to take the financial risk while you make monthly car payments. In exchange for this risk, you the consumer are charged interest fees. The interest rates charged on the money loaned by the lender is how the institution providing the loan will make their money. Consumers with a strong credit report can typically go to the lender of their choice and get the lowest interests rates available for borrowing the money to purchase a car.
Auto Loan Brokers
Auto loan brokers act as the liaison between the person seeking a loan and those providing loan services. The auto loan broker does not fund the loan, but will use the information provided by the consumer to locate the best auto loan available based on their statistics and history. Those with less than spotless credit histories may benefit by using an auto loan broker to help locate affordable resources to fund the purchase of a car. Since people with poor credit ratings have less financial opportunities, an auto loan broker can help them find the best deals available.
Those with decent credit may also choose to utilize the services of an auto loan broker, however their reasons may be vastly different. Time-pressed consumers who need to find an auto loan can take advantage of the connections of an auto loan broker to find an auto loan more quickly.
