A car loan helps you get the car you need, so it’s understandable that you want to increase your chances of getting your car loan approved so you can get your new vehicle as soon as possible.
Understanding what’s involved with getting approved for a car loan and having your finances in order can help make the experience an exciting rather than a stressful one.
Applying for a car loan
Car loans allow you to borrow the amount you need from a bank or lender to buy a new or used vehicle. You’re then required to pay off your loan in weekly, fortnightly or monthly repayments over the duration of a set loan term, as well as pay interest and fees on your loan.
Not all lenders offer the same car loans, so it’s worth comparing the options available to find one that suits your personal requirements and budget. Loan requirements and rates can vary and car loans are not a one size fits all solution. Choosing a lender that offers competitive rates and terms can help make buying a new car more affordable.
It’s important to be realistic and know what you can afford. Work out a budget for paying off your loan, and decide whether a weekly, fortnightly or monthly repayment schedule suits you better. Use a car loan calculator as a guide for how much repayments and interest may be. This will help you work out what repayment amounts will suit your budget.
Car loan terms can range from one to seven years. The loan term on your loan may depend on how much you borrow and the repayment amounts. When agreeing to your loan term consider that the longer it is the more interest you will end up paying, however your repayments will be smaller and therefore it can make it easier for you to keep up with payments.
As well as your loan costs, you also need to factor in the upkeep costs involved with owning a vehicle when applying for a car loan.
Getting approval for a car loan
The process of getting a car loan approved can involve a few steps, from finding the right loan, to gathering the necessary documentation and sending it to the lender.
For the approval process you’ll be required to provide key financial information, various forms and documents, including a drivers licence, proof of identity, and proof of income.
Approval depends on numerous factors including any other debts you may have, your monthly expenses and your employment history, and using this information lenders will determine how risky you are as a borrower. This can impact the rates and loan terms available to you.
Your credit rating can have a big impact on your car loan. It gives an indication of your reliability as a borrower. If you have a good credit rating you’ll be in a stronger position to get lower interest rates on your car loan. You can still get approved for a car loan if you have a bad credit rating, however, you’re likely to have to pay higher interest rates.
It’s important to understand that no company can guarantee every applicant will get approved for a car loan, and you may want to be wary of any company that promises otherwise.
There are various factors that can affect your chances of getting loan approval. For example, you are not likely to get approved for a car loan unless you have a secure job and income, and savings account. Lenders want to know you are financially stable, so you need to show you will be able to make your regular payments.
Seeking advice from a finance specialist can help make the process of applying for a car loan easier.
Speak with a finance specialist about your car loan
While the process of applying and getting approved for a car loan may seem complicated, with the help of a finance specialist, it can be much simpler.
Speaking with a finance specialist about your circumstances and financial situation will give you a better understanding of whether you will get approved for a car loan or not. If they don’t believe you will get approved, they can provide advice on what you need to do.
At 360 Finance, we find the best rates for you from over 40 lenders and banks. We help get your loan approved as quickly as possible, and arrange and guide you through the documentation needed before submitting to the lender for approval. We will also keep you updated on the progress of your loan application.
Contact 360 Finance about your next car loan.
