Do you plan to buy a car, but don’t have the full amount to pay in cash? In this case, you need to know how to get a car loan, so it is the best option for your case.
However, the process of applying for a vehicle loan is not simple. But calm down, you are not alone. In this guide, we will help you understand exactly how to get a car loan in the simplest and most efficient way.
We know that for many they need a car. Because it is an essential tool for everyday life. Whether to work, study or simply to have more freedom to move around.
Our goal is not only to teach you how to finance a vehicle, but also to ensure that the loan payment does not disrupt your budget. So get ready to know everything you need to get a car loan with good conditions. Let’s look at the step by step.
How to get a car loan?
1. See how much score you have
First of all, you should know how to still find out your financial situation.
The first step to getting a car loan is to see your credit score. This will determine the loan conditions you can get.
Your credit score will directly influence the interest rate on the loan and the maximum amount you can finance. The higher your score, the better the financing conditions. If you’re not sure of your score, many banks, credit cards, and personal finance websites, such as Experian, offer this information for free.
Attention! If your credit score is not very high, look for financing options with lower interest rates or even pre-approval before formalizing the application. In addition, we recommend that you apply the best ways to improve credit score, that can increase your score with simple attitudes.
2. Review various Car Loan offers
Now that you know exactly how much score you have, it’s time to look for car loans.
Don’t get stuck with just one option. In fact, it is essential to compare offers from different lenders. Here are some options for companies that offer car loans:
- Large national and regional banks;
- Local credit unions;
- Online creditors;
- Financing by the concessionaire.
When you start looking at different options, look for competitive interest rates, flexible loan amounts, and terms that fit your budget.
Here’s the tip! Keep reading, we will see the best options on the market later.
3. Pre-approve
Pre-approval is when the lender (company that will lend you money) has already done a preliminary analysis of your credit and knows exactly how much it is willing to lend you and under what conditions.
This helps you set a budget and avoids surprises during the buying process.
There are two types of approval you can receive:
- Pre-qualification: This is when you will have an idea of what loans you can receive, based on preliminary information from your credit history.
- Pre-approval: This is a more advanced step. This is when the lender has done a deeper analysis of your credit, which helps you negotiate and get better financing conditions.
4. Set a Budget
Now that you have the pre-approval offers, it’s time to set a budget for your car purchase. This budget should not only be based on the maximum amount that the lender is willing to lend, but also on their financial condition.
The calculation is important, to help you simulate the payment terms can impact the amount of your monthly installment and the total you will pay over the course of the financing.
5. Find the Right Car for You (How to Get a Car Loan)
Now that you know how much you can afford, it’s time to find the right car. There are a few key details to consider, such as:
- Lender Restrictions: Some lenders do not finance certain types of cars (such as discontinued models) or require the car to be from a specific dealership.
- New or used?: Used car loans can have different terms, so make sure the vehicle fits the lender’s requirements.
Remember that the more time you spend researching, the better choice you will make.
6. Complete the Loan and Buy Your Car
Once you’ve found the right car and have all the loan offers in hand, it’s time to finalize the financing.
If you decide to finance directly at the dealership or through an online retailer, be sure to check to see if they can offer a better rate than your pre-approved offers. This can help you save money.
2. Best Car Loans (How to Get a Car Loan)
When deciding to finance a car, finding the best loan option is important. The goal is to ensure the best conditions, with affordable interest rates and terms that fit your budget.
Let’s explore the best car loans that cater to different profiles, so you can choose the best one according to your situation.
1. Auto Credit Express
Auto Credit Express is a platform that specializes in helping borrowers with low income or poor credit find the best financing rate. Let’s look at the information provided by the company about the payment terms:
- Interest rate: Varies according to the lender;
- Loan term: 2 to 6 years;
- Loan Amount: $5,000 to $45,000.
To get this loan you must meet these requirements:
- Minimum age of 18 years
- Minimum income of $1,500 to $2,000 per month
- Full-time employment or fixed income
- Valid driver’s license
- Proof of insurance
- Resident of the U.S. or Canada
- 10% down
The platform basically gets to know you with several lenders in its network, offering flexible rates for those with bad credit history. If you have difficulties obtaining financing, this can be a good option to insure your car.
2. LightStream (How to Get a Car Loan)
If your credit score is good and you need quick funding, LightStream is an excellent choice. In principle, the payment terms are as follows:
- Interest rate: 6.49% – 15.29% (with automatic payment)
- Loan term: 2 to 7 years
- Loan Amount: $5,000 to $100,000
Let’s now look at LightStream’s criteria for its approval:
- Minimum credit score of 660
- Quick online application
- Zero fees for those who opt for automatic payments
LightStream is known for fast approval and direct funding, making the process of buying your car simple and hassle-free.
3. MyAutoLoan
MyAutoLoan allows you to compare vehicle loan rates before making a final decision. It connects you with lenders of different profiles, making it easy to find the best option. Its conditions are:
- Interest rate: From 6.74%;
- Loan term: 2 to 7 years;
- Loan amount: Starting at $8,000
To be approved, you just need to meet 4 simple requirements:
- Minimum score of 600;
- Minimum annual gross income of $21,600 for a purchase without refinancing;
- Minimum annual gross income of $18,000 for auto refinancing;
- The vehicle must be a maximum of 10 years old and less than 125,000 miles.
Conclusion (How to Get a Car Loan)
Getting a car loan is simple, but it can become an impossible mission. But the truth is that, with the right information and a little organization, you can drive your new (or semi-new) car without falling into a trap.
The key is to understand your own profile, know where to look, and compare calmly.
Don’t accept the first offer that comes along. Evaluate your possibilities, use online tools, ask for pre-approvals, and put together a realistic budget.
The approved car may not even come with digital air conditioning or a sunroof now. However, it will come with installments that fit in your pocket, and that’s what really matters.