Used Car Loan

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.

Get Pre-Approved

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.

Get Financing

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.

• Good customer service – Credit unions are made up of customers like you, so they’ll offer you great service.
• Not-for-profit – The only profit credit unions make goes to their customers, which is you if you become a member of your local credit union.
• Best interest rates – Credit unions typically offer the lowest interest rates.
• Better loan terms – Credit unions give you the best choices as to loan terms.

So now you can go the car dealership and shop with ease. Following these steps will not only better prepare yourself, but will also make your car-buying process more enjoyable.