How to Get a Used Car Loan
You should check your credit before trying to get a used car loan. Visit www.annualcreditreport.com for a copy of your credit report at no cost. You will be able to evaluate your credit score and credit worthiness. If you are classified as having bad or poor credit, you will need to take steps to repair it before applying for a used car loan. Check the report for accuracy. Many reports have erroneous information on them. If you find anything that is wrong, file a formal dispute with all three major credit reporting agencies. You will probably need to provide written proof of the error. If you have any judgments, liens, or loans in defaults you will need to pay these in full.
Your debt to income ration, or DIR, is very important when applying for a used car loan. Creditors use this ratio to determine if they think you are a good credit risk or not and whether they should loan you money. Your debt to income ratio is the amount of debt you have to pay per month relative to the amount of earnings you have coming in. A lower debt equals a better credit risk and thus a greater likelihood of getting approved for a used car loan.
Many used car dealerships have their own in-house financing. If you find a used car you like at a dealership that have their own financing department you may want to take advantage of it. The approval process may be easier since you are buying one of their vehicles.
You should ask the bank you already have a relationship with for a used car loan. Contact your local loan officer and ask if you qualify for any special finance programs since you are such a valued customer. Most banks have programs allocated to helping their current customers. If they don't offer a special program, inquire into what their current used car loan rates are and how you can apply.
Visit BankRate.com to see competitive interest rates on used car loans. This website features loan products from a variety of lenders so you don't have to visit each individual lender's website. After doing your research on BankRate.com you can then contact the specific lender with the best program and rate to see if you qualify.
The above tips will help you get a used car loan.
Published by Kristi Patrice Carter
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