5 Important things to do before you Apply for the Car Loan

September 11, 2019/Steve Tackett

Applying for a car loan? Confused about how to get a car loan?
Car Loan is the second biggest loan after Home Loan.
Go ahead and read on the blog to clear all the related queries.

1.) Analyze your Budget:

When you walk into Car a dealer showroom he will ask you, “What is your monthly budget? And this is a very obvious question whose answer you should know before applying for the loan.

The best way to know the monthly payment is to know the new/used car price before calculating the monthly payment of the car.

It is to analyze how much you can afford in reality and once you know your Car price you can use the finance calculator to help you find the monthly installments. Car loans can be given in 3, 4, 5 and 6 years of terms.

2.) Check the Credit score:

A credit score plays a major role in paying your car loans. Higher your credit score lower the car loan rate you get and save your money. Always make sure that your credit score is accurate which is based on your credit reports. You can easily check your credit score online.

People having poor credit scores will qualify for higher car loan rates and vice-versa. So, you can wait for the credit score to improve and reach a high credit score.

Credit Score

3.) Get a Pre-Approval:

You can easily apply for a car loan online and also through your local bank.

Check out the different car loans with other banks including the bank in which you already have an account.

You receive a confirmation mail once you are eligible for applying for a loan.

Even if you have a bad credit score, you can still get a pre-approval for the loan but your rate of interest will be higher in that case.

Credit Score helps to determine the type of loan you are eligible for. You have to qualify the minimum criteria of credit score depending on the company providing the finance.

4.) Applying for the loan:

You should apply for loan within a 2 week process so that your credit score may decrease slightly and helps to decrease the negative impact. FICO score shopping time period is of 14 days so that all the inquiries placed during this will be considered as one query thus reduce the negative score.

5.) Choose your Car:

Once you are done with your pre-approval process, you can focus on the car which you want to buy. 

From this blog, you will end up knowing that applying for the car loan and getting approval for the same is not an easy task.

Checking your credit scores, getting approval takes time and needs a lot of research before applying for a loan.