Getting a good deal on your auto loan is almost important as finding a vehicle you love for the right price. Here are a few steps that will guide you the next time you are looking for car financing.
1. Find out how much you can afford
Before you do anything, consider how much you are willing to pay for a new vehicle. Ideally, you should be able to pay off your loan within three years. However, paying off the loan as quickly as possible will contribute to your financial success.
2. Contact your bank or credit union
Next, find out how what type of interest rate various banks or credit unions are willing to offer you. Start with the bank or credit union you already have an account with and then branch out to one or two others in your area. This will give you a good idea of what you qualify for.
3. Gather your records
When you need car financing, chances are the institution giving you a loan will require you to submit various documents like proof of income and residence. To make getting a loan an easier process, have these records with you before you go and fill out a loan application.
4. Find a car
Once you have found and been approved by a lender, you will be ready to start looking for cars. Keep in mind what your limits and your budget are when you are out shopping. This will help you stay in control of your finances and prevent you from missing or making late payments.
5. Get in touch with your loan officer
After you have found a car you wish to purchase, contact your loan officer. At this point, your loan officer will help figure out what you need to do in order to purchase the car through the lender you selected.
If you follow these steps, obtaining car financing at a reasonable interest rate can be an easy and smooth process.
Do you have slow credit? No problem! There are plenty of ways you can still buy a new or used car. Keeping a perfect credit file is very difficult and you’re not alone if you’ve had some troubles keeping your finances in great shape. There are many dealers who understand this common issue and are willing to work with you.
First of all, what exactly is slow credit? Slow credit means that your credit file shows you often pay your bills late. Of course, the best thing to do is start repairing this as soon as possible. There are a few ways to do this, including making all of your payments on time from today on forward, or consolidating your bills into a singly monthly payment that makes it less likely you’ll forget a due date. If a job loss, illness or other hardship caused you to “slow pay” your bills, you should tell your credit report agency. Your explanation can then be put on your credit file so when potential lenders look at your file, they’ll also see the explanation about why you were late.
Once you’ve understood what is in your credit file, you can start looking for your car. And don’t assume your score is too low! There is no automatic cutoff score below which you won’t automatically be able to get financing. Some lenders will accept a score that others will not.
If you do have a low credit scare, make sure to check out average interest rates for your score before you head out shopping. This way you’ll know what is reasonable before you sign on the dotted line. And, once again, remember that different lenders are willing to give different types of loans at different rates. Make sure you’re getting the best deal!
Finally, it is often easier to qualify for a loan for a used car than a new one. There are a lot of great, reliable used cars on the market, so those may be the first place you should start looking for your new ride!