The word financing sends shivers up my spine. Imagine how financially set we all would be without loans. But the reality is that many of us need financing for major life purchases. And a car is definitely one of life's major purchases. The options are endless, and the terms can be confusing. This is a small guide to make financing your car just a bit easier.

Shopping for car financing can be as important as shopping for a car. You can negotiate an awesome deal for a new car, but then turn around and pay entirely too much to finance it. So what are your options?

Comparison shop. There are many sources of financing out there…you need to find the best option for you. Local banks are one of the major sources of financing. As far as price goes, however, this isn't always the best choice. If you feel comfortable with bankers and want your payments close to home, though, it can be a consideration. If you do your banking at a Credit Union, you can really save a lot of money here. Unfortunately, not everyone has access to a Credit Union.

If neither of the above financing options work for you, there is always dealer financing. Convenience is a definite advantage here, but you really have to be careful not to get in over your head. Some dealer rates can be reasonable, while others can be downright outrageous. Weigh all your options. Don't settle for one quote; shop around as much as possible.

You also must be aware of financing terms. New cars generally can be financed for up to 72 months, but the fewer months of financing the better. Used-car financing is almost always shorter, especially if the vehicle is older. Always opt for the shorter term. If you are having trouble affording the payments of a short-term loan, then you may want to think about purchasing a cheaper vehicle.

Do the research, and always remember to ask questions. When armed with this knowledge, financing doesn't have to be so scary.