If you are in the market to purchase a new or used vehicle, you don't need to shoulder the entire cost of buying a new vehicle upfront. Obtaining a vehicular loan is a great way to reduce the cost of purchasing a new vehicle. Here are three tips that will help you effectively shop for a car loan.
#1 Get A Free Copy Of Your Credit Report
The first thing that you need to do before you start shopping for a car loan is review your credit report. You are entitled to get a free credit report from all three of the major credit reporting agencies, Experian, Equifax, and TransUnion, at least once a year. You can also get your credit report directly from each company's individual website, although you generally have to pay a nominal fee for this service.
Obtaining your credit report will allow you to see where your credit stands and if you have what is considered an excellent, good or poor credit score. Knowing this information will help you negotiate and navigate the loan market as a more informed consumer. Obtaining your credit report also gives you a chance to look it over and make sure that all the information present on your report is accurate, and also gives you some time to look into correcting any inaccurate information on your credit report.
#2 Shop Around For A Loan Quickly
When you finally decide that you are ready to shop around for a loan, you want to already have a list of the financial institutions and car dealerships where you want to go through the loan approval process. The credit agencies are aware that it is best to make multiple inquires when trying to obtain a car loan. To facilitate the loan shopping process, credit agencies will count all applications submitted within a set time-frame, generally around two weeks, as one hit or inquiry on your credit score. This is important because the more hits your credit score makes, the more it will decrease. Don't spread out your car loan shopping period over a couple of months; that could result in multiple injuries on your credit score, which will decrease your credit score and make it harder to get a great loan.
Wait until you are really ready to purchase a vehicle, know what you want to buy, and have a list of potential companies that you want to work with. You are going to need to move quickly if you want to reduce the impact of getting a new car loan on your credit score. Click here to learn more about guaranteed approval.
#3 Focus On The Loan Total
When you start your search for a car loan, focus on the total amount that you need to borrow when speaking with lenders. The total amount should be a set price that you pre-determined you would need to borrow based on the specific vehicle or vehicle you are interested in purchasing. Focusing on the overall loan amount will help you compare loan features more precisely. Do not focus on the monthly payment when shopping for a car loan. Sometimes lenders will focus on the monthly payment amount to entice you to get a large car loan that will last for more years and thus earn the lender more money.
You should personally know what type of monthly payment you are aiming for, but that is not a number you should focus on in conversations with lenders. Let the lender know how much overall you want to borrow and how many years you would like the financing spread out over, and from there, compare interest rates and loan terms among multiple lenders.Share
7 December 2016
I drove small compact cars for over a decade. After I got married and had children, I began to realize that we could use more room than we had in my small car. I was considering buying an SUV or a small van, but I hesitated on making the change for quite a while due to thinking that it would be very difficult for me to learn to drive a new automobile style! Finally, I got up the nerve to test drive an SUV at a local dealership, and I was shocked at how easy it was to drive! I felt a little higher in the air, and that was the only difference. I decided to start a blog to share my story with other people afraid to switch vehicle styles and share other auto tips I have learned! I hope I can help you!