Financial institutions offer financing for different types of vehicles, including cars, aircraft, motorcycles, boats, yachts, and others. Borrowers who opt for a secured loan benefit from longer terms and competitive rates. Check for credit insurance, prepayment penalties, and other hidden fees and charges. Banks also offer unsecured loans to borrowers with a very good or excellent credit. Some finance companies also advertise low interest rates, but the repayment period is very short, and the monthly payments are larger. 
Generally, your credit rating is the most important factor for banks. If your credit score is in the 500 range, your interest rate can be as high as 18 – 20 percent. Borrowers with an excellent and very good credit score (i.e. over 700) are offered competitive interest rates.
A family member, parent, or friend is your first choice if you apply together with a cosigner. Another option is to apply for a loan through a car dealership, but the interest rate is usually higher compared to banks and credit unions.
Look for a loan with extra payments allowed and no early exit penalties. There are also refinance options with different interest rates and repayment schedules.
A down payment is usually required if you plan to finance an expensive item such as a vehicle or another asset. Financial institutions take less risk when borrowers offer a large down payment. The term varies, depending on whether you apply for a new or used car loan. Borrowers who opt for a longer repayment term benefit from affordable monthly payments, but they pay more in interest in the long term, which increases the cost of borrowing. If you are self-employed, you may have to present your individual income tax returns and other documents. Make sure you bring the required supporting documentation with you. Financial institutions that offer unsecured loans have more stringent criteria.
Traditional and non-bank lenders offer car financing. The application process may take several weeks. To make a decision, you may want to compare different car loan and interest rates or use an online calculator. Enter the start date, term, interest rate, and any extra payments. Customers also benefit from insurance and tax estimates.