Getting a car finance approved can be difficult and frustrating for some. If you have less then perfect credit, many conventional places will not even give you the time of day. Here are the steps you need to follow to make the process as easy and painless as possible.
The first thing you should do when looking to get a loan is to get a copy of your credit report and credit score. Knowing your score can help you in a number of ways. If your score is very low, then taking 6 months or so to repair your credit can make obtaining a used car loan much easier. If you have no credit or bad credit, do not panic because there are places you can get guaranteed auto loans. Although they will have a much higher interest rate.
There is paperwork you will need to gather together to obtain a loan of any kind. The loan officer will need to see 4 of your most recent pay stubs, 2 years worth of tax paperwork, copies of utility bills, rent or mortgage receipts, and any other bills you pay weekly or monthly. This paperwork is to show your debt-to-income ratio, and with your credit score, shows exactly how much you can afford to spend on your new loan.
There are several different types of auto loans available. For people with good credit, a low interest rate loan is available from banks, credit unions, and other lenders. Though for people with not quite so stellar credit, there are still places you can get a loan. Guaranteed auto loans are available with higher interest rates from loan companies that specialize in higher risk loans also with higher interest rates. Sometimes you will be able to find a lower interest rate loan with a larger down payment, or if needed and possible, a co-signer can often help you to secure a loan.
The easiest way to find the loan you need is by using a website that specializes in auto loans. To use these sites, you would enter your information into a search engine and the computer will match you with any loans that are available.
Once you have received several offers from different lenders, you need to look them over carefully. Some lenders seem to offer a good deal, but upon reading the fine print may not be as good as first glance showed them to be. Make sure to choose a loan without a large penalty for early termination if possible.
Once you have chosen the loan offer that is right for you, ask them to send you the actual loan paperwork to go over. If at all possible, having an attorney look over the loan is advised. If everything looks good then fill out the forms and send them back with any needed paperwork.
Once all the paperwork is filled out and approved, you may pick up your car and begin paying off your loan.