Car Loan Process: What to Expect when Applying

Over 70 % of new or "new/used" car purchases, require some sort of financing. Regardless of which type of loan you are applying for, it can be a very long, drawn-out and exasperating process. The few times I've had to do it, I was thoroughly fed up and worn out by the time I was approved. (I wondered exactly why I thought I needed a different car to begin with!)

You can apply for certain car loans online, but most customers/buyers apply at the Dealership where the car is that they are interested in purchasing. I would suggest checking your credit score either by mail or online before you go, so you at least know where you stand as a prospective buyer. Credit scores make a difference.

There are some steps you can take to make the process go a little more smoothly . When you arrive at the Dealership, one of the associates will show you to a private room or his office, where he or she will start the application process.

First off, know that you will need to bring proof of income, references, proof of employment, some sort of proof of how long you have been at your current address, and if it has been a short time, proof of time at your former address. You will also be required to provide your Social Security number, your phone number, all other loans you currently have and balances due on them, and what you have for collateral. You will also need to know the price of the car you wish to purchase.

There are questions you need to be prepared to ask also, and they are very important ones. First, you want to ask what the rate of the Interest is that you will be paying. It's also good to know beforehand, if possible, what the amount of the down payment is going to be. Another important question is how long the "term" is, which means how many months/years it will take for you to pay off the vehicle. Can you afford the monthly payment, and is there a penalty for paying off the loan early?

Once you have made the application, how long you will have to wait on the decision depends.In the majority of cases your application will be either denied or approved while you wait at the car dealership. Sometimes you will be required to bring in further documentation before receiving a final answer. If you aren't happy with the results, don't be afraid to ask "why" the decision was made.

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