When you go to buy a vehicle, it can be stressful. The loan process can seem overwhelming, but it can be easier than you think. Take these simple steps to getting your next car loan.
Check Your Credit
Before shopping for a car (or a loan) make sure that you check your credit. The better your credit is – the better your interest rate, which means it’s cheaper to borrow money for you. Which also can mean you can get more bang for your buck if you have good credit – a lot of people pay MORE for a lesser car than others, because of their credit rating.
A low credit score won’t necessarily keep you from getting a car loan, but I would suggest making sure you know what type of payment you can afford and what payments would be on specific vehicles before making up your mind on a car. If you have your eyes on a specific vehicle take some time to improve your credit score before you apply for any loans.
Know Your Budget
Like I mentioned, knowing what you can afford is ESSENTIAL. I’ve seen too many people say they will give up all these things in their lives for their ‘dream’ car , but let me tell you something – that feeling will go away really fast. Sure you may be able to on paper afford a higher payment than initially thought, but you also have to consider a higher insurance bill, possibly more money for gas – and don’t forget about the other things you left out of your budget – or the other costs that come along with owning a vehicle -regular oil changes and maintenance and of course tires as well (and if you haven’t bought any recently – they aren’t cheap!) Sit down and review your bank statements and make a complete comprehensive list of your outgoing monies before committing to 4-7 years of a monthly car payment.
After you check your credit, and figure out your budget the next step would be to get pre approved. BE SURE NOT TO GET YOUR PRE APPROVAL UNTIL YOU ARE READY TO BUY. Most pre approval loans are only good for a certain amount of time – usually 15 to 30 days – you don’t want to have to run your credit again, so don’t get it until you are ready to commit to buying. Look for a loan with a reputable company, and look for the best interest rates and loan amounts. If you are set on a particular manufacturer you can always check with your dealership for loan options – sometimes they can find you lower rates than you can find yourself!
Now the FUN part – GO SHOPPING
Before going to look at vehicles, put in a little research and find cars that fit into your budget and needs. Things to consider are size, color, gas mileage and any extra features that you may want. Read reviews and ask around to see which car might be best for you. Once you know what you want, go take a look! Compare prices at the dealership, and check dealer incentives and rebates to get your best price!