According to a study, car loan rates have declined significantly. It has hit the lowest point since 2002. Currently the auto loan interest rate is about an average of 4.4%, as compared to last year’s 5.8%. car loan The lowest rate of 1.9% was offered by Toyota due to the pressure of recalled automobiles and the highest rate of 7.1% was charged by Kia.

A low interest loan rate is always attractive as it encourages a lot of savings which is not possible from cash-back offer. However, this low interest rate is not for people who actually need it. Americans who have a low bank balance and a lesser disposal income are much in need of a low interest auto financing as they already have less dollars to spend. On the other side, people who are well off financially are offered loans at a lower interest rate. This is because of their credibility in financial market which is evaluated by their individual credit score.

It is obvious for people to pay their installments on time of they have enough dollars to do so. This will automatically increase the credit score. The people who suffer in this unfair process are the ones who do not have an average credit score. For them it is advisable that they pay all their debts on time and avoid repossession. This can be done through auto loan modification. Today there are several companies offering such services helping people out to save their car from repossession.

With economy recovering and jobs coming back, there are chances that banks might not lower the payments if asked for. The early you start your loan modification process, the better chances you have to convince your banks to reduce your monthly payments.

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