When you plan to buy a car, the first things you do is to go for a car loan. But applying for a car loan is a huge task which requires a lot of research. The basic thing you will have to ascertain is the rate of interest offered by various banks. It is better to compare car loan rates, terms and read the fine print of car loan offer.

You can start you research on car loans with the knowledge of different types of car loans existing in the market.

There are loans with fixed interest rates - In this type, the rate of interest does not vary based on market fluctuation. This is helpful when you see that interest rates are going up and there is no likelihood of it coming down. Most car buyers go for such loans, as they are assured that a fixed sum of money will be paid towards the loan re-payment. It is better to read the complete document before signing it, as there could be some hidden clauses which could increase the rate of interest without your knowledge.

The next type of loan rate is the variable rate or floating rate of interest. In this form of loan, the rate of interest varies during loan duration. You could reap benefits if the rate of interest is lowered by banks. People who like to take risk can certainly go for such loan rates. The banks are careful to fix a range for each type of loan. This rate could also require your approval.