A Beginners Guide To Applying for Your First Car Loan


Are you looking for a secured personal loan for your first car? This car loan guide will enable you to score the best deal on your first set of wheels. Getting your first ride is exciting, yes. But, that shouldn’t be an excuse to make costly blunders. So, be patient.

Why do you need a car loan?

This lending solution has many benefits over conventional financing options. Car loans are easier to manage. They have a finite repayment cycle. Plus, some car loans offer better interest rates.

Where do you get car loans?

Get a loan from a verified credit union, bank, specialized lender, or peer-to-peer lender. Lenders often work closely with various car manufacturers to facilitate these loans. Before you take out car financing it’s important to compare loan offers from other dealers. Dealership loans may be more expensive than conventional car loans.

How to apply for car loans

You provide the bank or lender with your details. The lender requires you to reveal any existing debts, income, and assets. You also include the details of the make and model of the vehicle you want to acquire. Before making your loan application, take a look at your credit score. The better your credit rating, the better loan deals you will receive.

Financing your car loan

If you are getting the funds from a third-party lender, you need referees to verify your personal and financial information. Therefore, give a prior heads-up to your landlord, mortgage provider, or employer that someone may reach out to them asking about your details.

What is the turnaround time for a car loan?

The time it takes to have your car loan processed often varies. The initial preliminary loan approval may take a few business days. Other factors that impact the length of the processing time include car model and your employment status.

How to speed up your car loan

If possible, try using a lender that offers pre-approval for your loan. It is much easier for you to convince the auto dealers to give you a good deal on a car when you have a pre-approval for credit.

How to Pay Off a Car Loan

A loan comes with several terms and conditions. Ensure that you read through the fine print to avoid inconveniences and misunderstandings later on. Only take a loan that you confidently know you will be able to repay. Ask the lenders if you can make over-payments to finish repaying the loan faster and check how this may impact interest rates.

What are the prevailing car loan interest rates?

The interest rates differ from lender to lender and from one applicant to the next. The majority of these loans come with 3, 5, and 7-year repayment contracts. Go online to find out the current car loan rate at your local bank or lender.

Bottom Line

Approach multiple lenders to get the best repayment rates on your car loans. Check out this great website for information before taking out your first car loan.

About the Author:

Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals

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