It can be difficult for you to get approved for a car loan. It may also take a long time for you to get approved. However, there are things that you can do in order to get approved quickly.
Check Your Credit
The Sydney car loan brokers will be more likely to approve you for a loan if you have excellent credit. If it has been a long time you checked your credit, then you should do so before applying for a loan. You should make sure that all of the information on your credit report is correct. Many people have low credit scores due to the fact that they have false information on their credit report.
Keep in mind that it will be harder for you to get a loan if you have poor credit. However, it isn’t impossible. There are some dealers who may still work with you. A good credit score will not only increase your chances of getting approved, but you will also be able to get a loan with a better rate.
Apply With Multiple Lenders
One of the best things that you can do to get a car loan quickly is to apply with as many lenders as possible. There are multiple lenders that you can apply with. This includes large banks, credit unions, online lenders and dealership financing.
There are several factors that you will need to look for when you are comparing lenders. One of those factors is the annual percentage rate. You will ultimately end up paying back more than what you borrow. That is why you should select a lender that charges a reasonable APR.
The loan term is another factor that you will need to consider. A reasonable term for a new car is 60 months, or five years. A reasonable term for a used car is 36 months, or three years.
You will also need to consider the down payment. The higher the down payment is, the lower your monthly payment will be. Additionally, you should consider the taxes and fees.
Have a Source of Income
The lender wants to know that you will be able to pay back the loan. They will ask for a source of income. You can present your paystubs, W-2 or 1099 as proof of income. The lender may ask for additional verification depending on the job that you have.
Prove Your Identity And Residency
The lender will ask for proof of identity and residency. If you have worked with this lender before, then you may not have to provide this. However, you will need this information if you are applying for a car loan with this lender for the first time.
Your ID or passport can be used for proof of identity. You can bring a bill or a letter from your mortgage company or landlord to verify proof of identity.
You may want to get pre-approved for a car loan. A company will do a soft credit check and verify your income. They will tell you how much money you can potentially be approved for based on your income and credit score. If you are not pre-approved, then you will know that applying for a car loan will be a waste of your time.
It is important to note that getting pre-approved for a car loan doesn’t hurt your credit score. Every lender doesn’t require a pre-approval, but it can only help you.
Understand How the Financing Works
Before you choose a dealer, you should know how the financing process works. There are many dealers that will give you several quotes at once. Other lenders will give you a deal through the manufacturer.
Have Your Down Payment or Trade In Ready
Your lender will likely require a down payment or a trade in. The down payment will cover a portion of the cost of the vehicle. If you don’t have enough money for a down payment, then you can trade your vehicle in. The value of the trade in can go towards the car purchase.
For example, the trade in value of your car is $8,000. You want to buy a car for #20,000. You will only have to borrow $12,000.
About the Guest Author – Raymond James
Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals.