Auto Loans That Direct Deposit Into Checking
Auto lenders are oriented towards providing fairly simple loans, but do require security for said loans. This means finding auto loans that direct deposit into checking can be tricky.
The auto loan process is simple and something you need to understand to grasp the direct deposit question and answer. The process works like this. You find a car that you want to buy. You apply for the loan. The lender approves you. The car is then purchased with the lender providing a payment, either check or electronic funds transfer, to the seller. In exchange, the title of the car lists both you and the lender as the owner. The title is the document filed with the government that proves ownership.
So, why does this matter? Well, most lenders are very sensitive about who the money is paid to and how title is taken. If they don’t have their name on the title of the car, they arguably are going to have a hard time enforcing their loan agreement by taking the car if you don’t pay. The same goes with transferring the money to you through direct deposit. How do they know that you are going to use it on a car instead of simply using it for something else? Further, how are they going to get their name on title?
So, is it impossible to find auto loans that direct deposit into your checking account? Well, no. There are a couple of ways to go. If you are buying a car, some of the credit card companies have auto loan departments that handle things much looser than traditional lenders. Capital One was famous for just sending you a blank check to buy a car with. This field, however, is in great flux given the current credit crisis, so you will have to shop around to see if you can find these deals.
The second approach would refer to a situation where you already have a car and want to get equity out of it. There are lenders that will give you what is in essence an equity loan against the vehicle. The rates aren’t great, however, because cars tend to not have a ton of value and often lose what they have pretty quickly.
There is little doubt that finding auto loans that direct deposit into your checking is a challenge. You will have to shop around, but there are companies out there that will do it. You may just have to look for untraditional financing.