First of all, about 70% of all new car purchases are financed. Financing a new car purchase requires some research if you want to get the best rates and lower your monthly payments. Generally, you’ll get approved if you have sufficient income and a good credit rating. Follow these steps in obtaining a loan to help you finance your new car purchase:
- Choose your new car and negotiate a price with the seller.
- Research interest rates. The interest rates vary greatly from bank to bank, or dealer to dealer. Compare the rates offered by the different banks and different car dealers.
- If you’re planning to trade in your old car, do some research to determine the trade in value. Research values in the Kelley Blue Book Used Car Guide, available at the library, your bank or on the Internet. That way you know you’re not getting ripped off at the dealer.
- Find out how much of a down payment you can afford. Use your trade-in value and cash, or just cash, to come up with the standard 20%.
- After step 2, you should have an idea where to get a loan at the best rate. Aplly for the loan and determine if the length of the loan and monthly payment will fit your budget.
- Consider saving more for a down payment or choosing a less expensive car if you don’t qualify.
- If you’re turned down because of a bad credit rating, work on improving your credid. Try again after six months of paying your bills on time.
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