When doing research for automating loans, we recommend that you come prepared with a list of your own questions. This will help you understand the auto loan process and have all the information you need to make an informed decision.
Some of the questions you may have:
- What supporting documentation do I need?
- How long will the process take?
- What factor will my credit rating have?
- What should my down payment be? Do you require a set amount?
- What is the trade-in value on my car?
- What would my base interest rate be? Will it ever change?
- To secure this rate, do I have to pay points? (Points are a percentage of the loan the lender may charge you as a fee)
- Over the course of the loan, how much interest would I end up paying?
- What fees are included?
- What would my monthly payments be and for how long? At the end of my term, will a lump sum payment (typically a larger final payment) come due? Can I lock in on the quoted rates/points? Is there a fee to lock in?
When you are buying a new or used vehicle it is very important that you do not financially overextend yourself. If you have credit challenges, one of the best ways to raise your credit score is to obtain financing and make the monthly payments on time. Lenders have formulas to calculate the maximum allowable payment. Following is a general rule to keep in mind to make sure you do not overextend yourself.
First, divide your income by 2. If you make $3,000 per month that would leave you with $1,500 disposable income. From your disposable income, subtract any monthly payments that you currently have. For example: rent, telephone, utility bills, and vehicle insurance. Note that depending on your age, where you live, and the vehicle you select, the insurance payment may be as high as
Tips On How to Get a Car Loan
Here are some key tips and tricks to securing a car loan.
- Be prepared with all the necessary information before you apply
Possible information includes copies of pay stubs, current bills showing present balances and other documentation that verifies your finances.
- Be honest and upfront with your application. Automotive lenders want to help you and can only do so with full information. This will help secure the best possible loan for your specific case.
- Set a realistic and comfortable budget before you apply for a vehicle loan.
- Use supporting financial information to assist with securing a favorable loan. Perhaps this is a letter from your employer with a salary range could certainly assist.
How Do I Know If I Qualify For an Auto Loan?
The easiest way to find out if you qualify is to call and speak to one of our financial consultants. You can also fill out our secure online credit application. We can assist with financial information and help you qualify for an automotive loan.
What Will My Interest Rate Be?
Interest rates are determined by the lenders and are influenced by several factors, including your credit score, the amount of down payment, the vehicle age, employment stability and other factors. We will explain the full process, and tell you exactly what your interest rate will be once the application is started. Have any other questions? Do not hesitate to contact us for more info!