Business

7 Ways To Get A Fast Car Loan Approval

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.

The car loan application process can sometimes be a tedious and time-consuming one. It is not uncommon for people to spend days on the phone, sending faxes back and forth, filling out endless forms online, and more just to get approval from a lender. These seven key factors will help your application sail through the system with ease to streamline this excruciating process as quickly as possible.

1. A Good Credit Score

Your credit score is the single most important factor lenders will look at when determining your approval prospects. If your credit score is less than stellar, it may not matter how much cash you put down on a car or how much you want to pay each month on loan. The majority of lenders will deny your application and move on to more viable candidates. Before starting your search for a car loan, you need to obtain a high credit score so that your application will stand out and be considered. This can be done in various ways, but the easiest way is to obtain at least one secured credit card to place on your report. Once the account has been opened and verified, your score will automatically improve.

2. A Low Interest Rate

The current national average for car loan interest rates is at around 4%. Depending on your credit score level, this may not be enough to entice you to apply. If you are worried that you could end up dealing with a lender that is unwilling to offer you a reasonable interest rate, you need to take the time to shop around until you find one within your budget. Going with a lender who offers the least amount of risk, such as Auto Car Loans, will greatly increase your chance of securing an approved loan. Dealing with lenders who are willing to throw out ridiculous offers will only end up making you look desperate.

3. Capital

If you are planning on buying a used car, chances are that you will not be able to put any money down at the time of purchase. If instead, you are looking to obtain a new vehicle, you can afford to pay half or even more of the total loan amount upfront. This will also allow you to obtain a better interest rate since most lenders will be willing to offer you a lower rate in exchange for the cash you are putting down. Also, keep in mind that the more equity you have in the vehicle, the more likely you will obtain a competitive interest rate when deciding on your terms. If you are only putting down a small percentage of the loan amount upfront, the chances are that your lender may not make an effort to work with you. To find a lender that is willing to take you just as you are, however, you need to work with one that has an extensive network of lenders.

4. A Low Payment

While it may take some time for your credit score to improve, this does not mean that your payment history can’t improve overnight. If you are aiming for a low payment over time, consider looking into the option of obtaining a car loan with no down payments. Doing so will allow you to qualify for an interest rate equal to or less than what you would have received if you had put down some money. However, keep in mind that those who obtain a loan without putting down any money will also be responsible for any car repairs and other costs as they may arise. If you are looking to make your payments as low as possible, you must look into this financial planning option.

5. A Long Loan Term

 

If your budget is tight and you want to make your monthly payments as low as possible, don’t sign up for a short loan term. Instead, look at taking out a loan that will last for 60 months or longer. While longer-term contracts can be burdensome, they can also help you save more money in the long run. Considering the rental car industry, most people end up spending more money on their cars over a year than they originally paid out in monthly payments. If you are looking to save money on your monthly expenses, look into getting a loan with an extended-term.

6. Your Driving Record

Despite what anyone may tell you, there is no way that lenders will automatically approve you for a loan if you have any traffic violations or other issues on your record. While this can be an issue for people who are trying to obtain a car loan for their first vehicle, it is something that you should regularly check on your own. If you cannot obtain a loan because of your driving record, it is best to immediately consolidate your debts and start looking into applying for alternative financing options.

7. Your Purpose

Finally, the reason behind your interest in securing a car loan will also play a huge role in whether or not you receive approval. If you are looking for a new vehicle, the chances are that you will be approved to purchase one. If, instead, you are looking for a way to get around town and do not plan on purchasing another car for several years, however, look to obtaining financing particularly designed for people who need a vehicle for temporary use. By having a loan specifically for this purpose, you can obtain a less expensive rate than most loans for people who have a long-term need.

Conclusion

several different factors will affect your ability to secure a car loan, but these seven tips can help you put yourself at the top of lenders’ lists. Keep in mind that following these steps may not automatically guarantee approval, however. There are other people with the same credit scores and payment history as you, so it is up to you to show your determination and desire to be approved. If you do this, there is no doubt that you will be able to land the best car loan for your needs

Related Articles

Leave a Reply

Back to top button