Used Car Loan
You’ve discovered you’re in need of a good used car and will need to take out a loan. If this is your first car loan, you may be uncertain as to what it all involves or if you’ll even be eligible. Below are some tips on how to get a vehicle loan and what you can do to ease the process.
Check Your Credit
Few things are as embarrassing as applying for car loans and discovering you have low credit scores from some old debt you thought you had paid. You are entitled to one free credit report per year from the major credit reporting agencies (TransUnion, Equifax, Experian), so get your credit report as soon as possible. If there are any errors, contact the agency to have the errors fixed. Your credit scores will determine not only if you’re approved for car loans but also what type of interest rate you’ll be charged.
Once you know where you stand as far as credit score goes, a trip to the bank should be your next step. A lot of time can be saved by knowing not only if you’ll be approved for a used car loan but how much you’ll be approved for as well. Banks will give you a pre-approval letter to take with you to the dealership. Why waste time looking at $30,000 vehicles if you can only borrow $15,000? Once you’re pre approved, you’ll know what type of vehicles you’ll be able to purchase. You can also inform car dealerships of your limit, and they can immediately show you what’s available to you.
Check with Insurance Company
Auto insurance is required in all states, so be prepared to start paying insurance on your vehicle. In fact, the lender will require you to have full coverage on your vehicle until the loan is paid. Certain factors affect the amount of your premiums, including make, model and year of vehicle. If you know the type of vehicle you want to buy, your insurance agent can give you some ideas of what you can expect to pay so there’ll be no surprises later.
If you’re this far in the car-buying process, you may have already secured financing. Hopefully, you’ve done your due diligence and shopped around for the best deal on your used car loan. There are so many lenders available today, including savings and loans, community banks, credit unions and even online lenders. Choosing a lender may be difficult particularly if you’re getting approval from many lenders. Credit unions been around almost forever and tend to work for the customer. Here are some benefits of using credit unions for your car loan.
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ABOUT THE AUTHOR
Nate Marks enjoys writing snippets here and there.