Despite the abundance of online topics on the subject, there are people who enter into a car loan agreement without knowing full well what they’re getting into. Given the inherent complexity of an auto finance loan, jumping into the fray without knowing what you’re in for can lead to a lot of heartbreak and frustration. Educating yourself is the key and there are ways to ensure your application gets approved fast while avoiding disheartening disappointments in the future.
Saving up for a hefty down payment is the single most valuable undertaking you can do to get approved fast. Targeting a 20 percent down payment is a good place to start, but the more you can put down, the faster you can get approved, not to mention better rates will also open up for you.
Evaluate your financial standing
Before you meet with a lender, you’ll want to take a look at the three things they’ll be sure to ask you, namely your credit history, income, and the percentage of your income that will go to paying your monthly loan amount. It would be wise to consult a financial advisor not only to identify if you are in a good position to apply for a car loan with your current financial standing, but also to help you plot a payment strategy that works.
Fix your credit rating
A subpar credit rating is a red flag for loan providers, as this tells them that you’re not a diligent payer. You need to show your lender a good credit history, and this means you have to pay off outstanding credit balances, and pay your bills completely and on time. If you have debt that you can’t pay off immediately, secure documents that prove your ability to pay. The goal here is to convince the lender that you have the capacity to pay the auto finance loan you’re applying for on top of your existing loan.
Getting pre-approved before you start shopping for a car loan is the sensible way to start the car-shopping process. By getting pre-approved, you learn how much you can afford, interest rate and all. It’ll also tell you how much you can set aside. Furthermore, you’ll know which vehicles are well above your paygrade to keep your choices in check.
If your financial situation can’t be helped as of the moment, and you’re in dire need of a car, not everything is lost. Bad credit auto loan providers like Dick’s Auto Loans are available help you. Get in touch with them to learn how you can still own a car even if your credit rating is in the dumps.
5 Tips For Getting Your Bank Loan Approved, Forbes.com