Qualifying for an Auto Loan

October 10th, 2007|| · No Comments ·

Many new car buyers need to take out an auto loan or personal loan to pay for the car. Because they may have little or no credit, this is easier said than done in some cases. While cheap loans are available to those with limited credit histories, they may not be enough to cover the cost of the car. When buying your first car, you should consider other expenses as well including insurance, gas, maintenance, and the cost for emergency services. Once you figure out how much you can afford, then you will need to convince a lender that you are responsible enough to repay the loan.

Start by visiting your bank. Since they know you and your financial history, they may be able to find a loan that is appropriate. If buying a new car, you won’t have to worry about the car being overpriced, but if buying a used car, you need to be sure that it not overpriced or the bank will not grant the loan. Some lenders will ask for an inspection when buying a used car.

If you have bad credit, outstanding payday loans and other bills, you may have a difficult time qualifying for a car loan. Many dealerships have lenders available who are willing to take a chance on lending you the money at a higher interest rate. If you can afford this, you should take it because once you pay off the loan you will be able to qualify for larger loans in the future including refinance loans and mortgage loans.

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Tags: Loans

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