How to Get Pre-Approved Auto Financing

If you are looking to get auto financing, it is important to recognize that there are a variety of ways to finance your car. For example, you may wish to finance your car through a dealership auto financing program or you may wish to finance your car through a private lender, such as a bank. Regardless of which lender you work with, getting pre-approved for auto financing can make finding and driving away in the car of your dreams a reality.

Here's what you need to know about getting pre-approved for auto financing:

Pre-Approval

Pre-approved auto financing requires that you have approached a lender, such as a bank or auto dealership, and ask for a loan so that you can pay for a car. The lender will take a look at your credit history and credit score in order to determine what your risk level is. The risk level means that the bank wants to evaluate how realistic it is that you will be able to repay the loan in full on time.

For example, if a diner waitress making $33,000 a year was to approach a lender and ask for a loan of $100,000 to buy a customized Mercedes, the lender may determine that the waitress has a high risk of not being able to repay the loan. However, if the waitress were to request a loan for $11,000 to pay for part of a pre-owned vehicle, the lender may determine that there is an increased chance that the borrower will be able to repay the loan.

Choosing a Car

Once a borrower has been pre-approved for a loan, he or she needs to select the automobile that meets his or her budget and needs. Just because a lender allows the borrower to borrow a large sum of money to buy a car doesn't mean that the borrower has to use the entire sum of money for the car purchase. Remember: all of the money that is borrowed will eventually need to be repaid with interest.

The Left-Over Money is Not Play Money

When buying a car with pre-approved auto financing, if there is left-over money in your pre-approved loan that you are not spending on the car, you will probably not be able to spend that money on other items, such as groceries or rent. It simply means that you will not take out a loan for more than the amount that you are paying for the car. Therefore, use the pre-approved auto financing as a maximum amount of money that you will be able to spend, but certainly make sure that your car purchase suits your unique budget.

If you have any questions about auto financing and obtaining a pre-approved loan, contact a sales agent today. We're happy to determine how much auto financing you may qualify for as well as what types of vehicles may suit your budget!

Bad Credit Car Loans For Anyone

Just about anyone can qualify for a bad credit car loan, no matter what a person's credit history or current credit score is. In order to get a car loan when you have bad credit, there are some things you need to know that can help you get the lowest rate and highest amount of money possible.

Here's a brief overview of what you need to know in order to get a bad credit car loan:

Understanding a Loan

When you approach a loan officer, it is important that you demonstrate to the loan officer that you understand what the terms of a loan are. Essentially, a car loan is money that is borrowed from the lender. That money will need to be returned to the lender over a pre-determined period of time. Because the lender needs to make a profit on the loan in order to stay in business, the lender will charge an interest rate for the loan. Therefore, be sure that you are comfortable talking about interest rates with the loan officer when you sit down for a chat.

Interest Rates

The interest rate for a car loan is the amount of money that the borrower will have to pay back to the lender in addition to the loan principal. For example, if you take out a loan for $10,000 in order to buy a car, you not only have to repay that loan, but you will have to repay interest on top of the loan. If you get an interest rate of 6 percent, then you would need to pay back an additional $600 on top of the principal amount of money that you borrowed.

Credit History

Your credit history will affect just how low the interest rate is for your loan and how much money you can take out. For this reason, borrowers with brad credit will usually have higher interest rates and lower loan caps than borrowers that have proven that they are able to repay loans on time. When you speak with a loan officer, be able to explain why you have bad credit. If you are able to prove to the officer that you are in a different position now than you were when you got the bad credit, you may be able to get a better interest rate. For example, you may need to show the loan officer that you have a job that will allow you to pay back the loan amount on a regular basis.

No matter how bad your credit is, it is always possible to get a car loan. The amount of the loan and the interest rate on the loan amount may vary a great deal depending on your credit history, but remember that getting a loan is always possible if you are in need. Contact one of our sales agents today to discuss loan options and to match your budget with a vehicle on our lot.

Finding a Car Loan After Bankruptcy

If you've just discharged your debts and come out of bankruptcy it can be challenging to find an auto loan. You will need to check your FICO score after bankruptcy because if your score is too low you may be stuck with an exorbitantly high interest rate in the 10-15% range. That can add up quickly if you're buying a car over $10,000.

If you can scrape together some money, try to put 20-30% down on the car so you can reduce your monthly payment. If you have a trade-in car, try to sell that to a private party. A private party sale via Craigslist will get you much for your car than a dealer trade-in. Check out the blue book value first for your zip code so you know what to list it for.

If you buy a car from a dealership, don't be afraid to shop the loan around. They may offer you a low annual percentage rate, but also may get a better deal through your bank or credit union.

You don't have to wait for your bankruptcy filing to be completely finished before you start applying for car loans. Start searching for a loan and try to get pre-approved before you decide on your purchase. The last thing you want to do is find a car and then not be able to find the loan you need.

Whatever loan you decide on, check for hidden fees and prepayment penalties. There's no reason to accept a high interest loan where you can't pay down the balance when you get yourself back on your feet. Take the time to read the fine print, it can save you money and keep you from ending up back in bankruptcy.