Getting a car loan does not have to be difficult at all. Contrary to popular opinion, obtaining a new or used car loan is actually one of the easiest and simplest things to do. Yes, it can involve a lot of money, but that shouldn’t deter prospective car buyers from engaging in the car purchasing process. Here are five useful steps when pursuing a car loan.
#1 Determine if a car loan is indeed required or if enough savings are on hand
Not every single car buyer needs a car loan for a purchase. Some buyers have enough savings to simply write a cheque. However, if a car loan is indeed needed then a buyer should determine how much he/she has on hand to put down as an up-front payment and how much of a loan will be required for the specific make, model, and year of the vehicle desired.
#2 Ensure that credit is up to par
Before attempting to obtain a car loan, it’s imperative that a prospective car buyer’s credit has been improved and spruced up enough to ensure that when the car dealer runs a credit report, he’ll see a good credit profile. If the credit profile is poor then it needs to be rectified usually by paying down all general debt and also clearing up any credit card payments first.
#3 Have all proper documentation available
A car buyer needs to show the finance department of a car dealership or an outside lending company his/her driver’s licence and a second form of identification to prove and validate that he/she is who he says he/she is. The lender will also want to see if the car buyer has adequate income to be able to make the monthly payments on time. Moreover, buyers could bring any titles to any collateral they may also want to put up in order to help the car loan go through.
#4 Search out specific prices, makes, years and models that are desired
Due diligence is required so that the buyer will be as informed as possible concerning the range of vehicles that he/she may potentially want to purchase. This research will enable the buyer to avoid being overwhelmed by the choice available and making the mistake of choosing a vehicle and loan that’s financially unrealistic.
#5 Obtain the financing
The price of a new or used car does not just include the actual car sales price. It also includes paying for tax, extras and any associated dealer fees. Used cars that are purchased from private parties don’t include any extra dealer charges. Once the credit approval process is finalised, a car buyer can obtain enough of a loan to pay for the car.