When it comes to getting a car loan from a dealership or a bank, there are several pros and cons to both options. You can take a loan from a dealership or a bank, depending on your specific needs and requirements.
If you don't have time to complete the paperwork required for a car loan, a dealership would be excellent because they can complete all of the necessary paperwork quickly. They have knowledgeable employees who can guide customers through the documentation procedure. With a dealership, the time required for the loan process is reduced because they handle the full loan process on your behalf to get the loan sanctioned. If time is an issue, a dealership is a better option than asking for a loan from a bank, where you will have to handle all of the paperwork yourself.
Pros of Getting a Car Loan from a bank:
- Borrowing straight from a bank is a preferable alternative if you want a variety of lender possibilities.
- There are numerous banks that provide various loan amounts, terms, interest rates, and EMI repayment alternatives.
- There are also other features on their loans that the customer can investigate.
- A person's preferred bank might be chosen depending on their own demands and preferences.
- If one wants a lower rate of interest, borrowing from a bank directly would be beneficial. This is because banks have a certain fixed interest rate for most of their credit products. The interest rate can also be negotiated if one is an existing customer of that bank and has a good credit score.
Pros of Getting a Car Loan from a dealership:
A dealership will mostly have a relationship with only one or a few lenders. This limits the customer's ability to make a decision. Also, in the case of a dealership, they will need to make a profit for themselves and so this usually reflects in a higher interest rate.
A dealership might be a better option for someone with a bad credit score. Banks consider a person's credit score for determining creditworthiness. So, if you don't have a decent credit score of at least 750, you're more likely to have your auto loan declined by a bank. A dealer, on the other hand, will hunt for ways to get your loan authorized and may even provide special financing packages to customers with bad credit or no credit.
Check and compare the best car loans in the market right here.