Introduction
Getting a car loan is not always easy because the lenders have to assess the credit status of the borrower. But what many people do not know is that there are certain things that you can do to increase your chances of being approved and own the car of your desire and drive away in it. At Automatic Car Credit, we do not consider our client’s financial status while assisting them to secure financing. In this article, you will learn the 10 secrets on how to get approved for a car loan and how our team can assist you.
- Know Your Credit Score
It is therefore important to know your financial status before applying for a car loan. Your credit score is one of the most important parameters that is taken into account by the lenders when considering your loan application. Go to a credit report service and check your credit score and possible mistakes that may reduce your chances of being approved.
- How to Save Money for a Down Payment
It has been found that down payment plays a very important role in the loan approval process and the greater the down payment the better it is. It demonstrates to the lenders that you are serious and it reduces the loan amount which leads to the reduction of risk. Just a 10% down payment can help you get a loan approval and may help to reduce your interest rate as well.
- Get Pre-Approved
Think about getting pre-approval for an auto loan before you go out to car shopping. Pre-approval not only helps you know your financial capacity but also enhances your credibility to car dealers. At Automatic Car Credit, we make it easy to get pre-approved for a car loan so that you can get the car you want.
- Improve Your Credit Score
It is not mandatory to have a good credit score to obtain a car loan but it will be beneficial if your credit score is enhanced before applying for the loan. Even basic steps like clearing the credit card balances, paying off the outstanding loans, avoiding the utilization of more than 50% of the credit limits, and regular payments also go a long way.
- Consider a Co-Signer
If your credit score is less than ideal, having a co-signer with a higher score can boost your chances of approval. A co-signer can help assure the lender that the loan will be repaid, potentially leading to a lower interest rate as well. Just be sure your co-signer understands their responsibility in case of missed payments.
- Choose the Right Lender
Not all lenders are created equal, especially when it comes to borrowers with less-than-perfect credit. At Automatic Car Credit, we specialize in providing flexible car loan options for individuals with poor credit or no credit history. Choosing a lender that works with all types of borrowers can make a significant difference in your chances of approval.
- Keep Loan Terms Realistic
In the car loan application, people should not aim at getting very high loan amount or very favorable loan terms. It is important to think of what you can afford depending on the amount of money you are willing to spend per month. It is possible to get into some problems if one takes out a loan that he/she cannot afford. At Automatic Car Credit, we are very much involved with our customers to ensure that we come up with loan repayment terms that are affordable.
- Shop Within Your Budget
This is particularly so when one is out shopping for a new car, one may be tempted to go overboard and buy the car of his or her dreams but this is very counterproductive when it comes to getting a car loan. This means that you will be in a position not to apply for loans that are more than you can handle in case you are faced with challenges in repaying. This way, you are likely to get approved without straining your financial muscles by going for expensive items.
- Provide Proof of Income
Banks and other similar institutions need to be assured that you have a steady income and that you shall be able to meet your installments every month. In case you are applying for a car loan, you need to ensure that you have prepared recent pay stubs, tax returns or bank statements to support your application. This step is very important especially for those who have a bad credit because the lenders will focus on the income factor.
- Consider a Trade-In
If you already own a car, you can use it to trade in and this will go a long way in bringing down the total amount of money that you will need to borrow. Most of the car dealerships including Automatic Car Credit have some trade-in offers that you can use to bring down the cost of the next car. It is also important that you get an appraisal of your current vehicle so as to determine its value before the negotiations.
Bottom Line
Applying for a car loan may sound like a herculean task but there are ways to get approved and here are the ten tips. Whether it is boosting your credit score or selecting a dealership, you are on the way to owning a new or used car. At Automatic Car Credit, we believe in lending to all sorts of credit and helping people get the car financing they need. Begin your car buying process with us today and get a much easier approval process than you may expect.
If you’re ready to take the next step in securing a car loan, contact Automatic Car Credit today or apply online for pre-approval. Let us help you find the right car and the best financing options for your needs.