It’s not a comfortable feeling when your fate is in the hands of someone else. It’s bad enough when that someone else is a taxi driver but when it’s someone you cannot see in an office you don’t know like when trying to get approved for a car loan, it can be even worse.
While you cannot guarantee a lending decision, there are things you can do to improve your chances of being approved for a car loan, as our Niagara Falls loans team explains.
Know your credit score
The first thing you can to do help your application is know your credit score. It has a definite influence over how much you can borrow and whether you’re approved or not, so it’s well worth checking.
In fact, we would say the earlier you check the better. If your credit score could be improved, it’s worth doing it before the loan application rather than after as it could get you a lower rate.
Save for a down payment
Down payments go a long way to improving your chances of being approved for a car loan. The lender is considering giving you a large sum of money, which is a risk. Knowing you have your own money at stake too helps settle their mind.
If you default, the lender can repossess the car. Knowing you paid some of that value with your own money means they stand to lose less should the worst happen.
Lenders hate loss, so the more you can insulate them from that with a down payment, the better.
Get your financial life in order
Lenders look at your entire financial life, not just your income and outgoings. If yours looks muddied and chaotic and you have debts everywhere, you’re unlikely to be approved for an auto loan.
If you have everything in order, know where all your money is going, have reasonable levels of debt and never miss a payment, that paints a much brighter picture for the lender.
Before applying, make sure you’re ahead of all debt, making all payments on time and make it look as though you’re in complete control.
Only apply for the auto loan you want
The advent of auto loan preapproval means lenders are more used to seeing hard inquiries on your credit report than before. But, make sure to only apply for the loan once you have researched and done your due diligence.
Too many hard inquiries and lenders will begin asking questions. Why are you applying in so many places? Is there something we’re not seeing? Are you looking for multiple auto loans at once? Is this even you?
You want to avoid those kinds of questions at all costs as they will cause lenders to hesitate and that’s the last thing we want them to do!
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!