There are different types of car loans available and many ways to get one. Many can be found online while comparison shopping, this is usually the most time efficient way. Some others can only be obtained through the dealership or a financial institution. Most depend on your credit score, so if you have bad credit you’ll have better chances getting a loan through the dealership.

Here are four types of car loans available to you:

Auto Equity Loan ­– If you are a homeowner you can use your home’s value as collateral to secure a loan. It is actually a home equity loan and because you are using your home as collateral the interest charged is tax deductible. This type of loan can be used towards either a new or used car. The rates are usually favorable, but if you fail to properly repay the loan, the lender can legally seize your house. This should be done with a bank or the financial institution you hold your mortgage with.

New Car Loan – New car loans are widely available online, through a bank or the dealership. You need to show the lender your credit information proving you can make the agreed upon monthly payments. Typical terms for a new car loan are between 5 to 7 years. Interest rates for financing a new vehicle usually range between 7 and 10 percent, but will vary depending on your down payment or the value of a trade-in. Promotional offer can also affect the interest rate. Last year’s new cars are always less expensive than the latest model, that’s why end of season sales during the holidays periode is the best time to buy.

Auto Refinance Loan – An auto refinance loan is used to refinance a new or used pre-existing car loan. When a car owner can no longer afford the monthly payments, he may apply to have the loan refinanced, which in turn will lower the monthly payments by extending the life of the loan and raising the interest rate by very little. The amount borrowed to refinance is not the full value of the car but rather the remaining balance left to pay on the vehicle. In this case, the car itself is the collateral for the loan, therefore it can be seized if payments are not respected.

Lease Buyout Loan – You may need a lease buyout loan if you’ve come to the end of your 3 to 5 years term and are unable to buyout the fixed option to purchase amount that was set at the beginning of the loan. In this case a bank or financial institution pays the car dealership (or whoever financed the auto loan to begin with) the balance of the lease and in turn the car owner pays the remainder of the fixed purchased amount to the bank in monthly payments. Lease buyout loans come with a low monthly rate and option to purchase which makes it an attractive option for individuals and business shopping for a new vehicle without the new car rates.

Here’s a factor to keep in mind when shopping for the right car loan; while prolonging the life of your loan may lower your monthly payments, the real deal in purchasing a car lies in getting the lowest APR.