Introduction to Vehicle Loan
At the present time, it is much easier to apply for a car loan since almost everything can be done online. With that being said, loan applicants can simply visit an online banking site and apply for a car loan (for private party use only).
So what exactly is a car loan?
A car loan, also called as auto loan / automobile loan and auto financing/ car financing, is a type of personal loan where the amount of money that the applicant gets will be solely used to buy a car (either brand new or second-hand) at the nearest car dealer near the client.
To qualify for the best interest rates, a car loan must have the following loan terms:
- A loan term of 3 years or less
- A total loan amount of more than $10,000.00
- Vehicle value of not more than 100%
- Automatic payment from a U.S.A Bank
In return, the money borrower agrees to the loan terms then repays the total loan amount (plus the interest rates) to the moneylender – this is usually agreed to be done in monthly payments (instead of paying the total price in a lump sum) until it is fully paid. Take note that the longer the loan term, the higher the interest rates and vice versa for the short-term car loan.
Things to Consider before you Apply for a Car Loan
Do not prolong the stress of earning more and saving enough money to buy your dream car, go out or go online and apply for a car loan now! With that being said, we have listed all the important things that you need to do and consider before you apply for a car loan:
- Know how much is your Budget for – Knowing how much money you only have and the total price of the car payment (and monthly payments). Aside from that, you must think ahead and include the costs of car registration, car insurance, and the car care and maintenance that entails to it (such as changing of oil, emission tests, car wash, etc.). in short, think beyond the car loan because it is not all there is when you get your own car.
- Check your Credit Scores – Before you do some research about auto loans, you must check your credit scores, credit card, credit report, and credit history first. We highly advise you to do some credit report check every year so that you can easily monitor your credit scores (and see if it is accurate or not). The good your credit score is, the easier it is to secure an auto financing loan and be certain of approve loans in the future. With a perfect credit score, a good credit report, and a flawless credit history, you will get loan terms with low interest rates!
- Shop for the Best Car Loan for You – Now that you have checked all your credit scores, credit card, credit report, and credit history and everything is good, you can now go and shop for the best car loan for you! With that being said, apply for a car loan that suits your financial capacity, fits your lifestyle, and will not break your budget. Loan for a car with a size that is for private party use only, pick the car that is in your favorite color, take a look at the gas mileage, plus check the car’s interior and exterior features.
By following all the pointers above, you will surely get your car loan approved fast (or better, get pre approved!) and you will definitely be driving your dream car home in no time! So, you must always remember the given pointers if you want to apply for a car loan.
How to Apply for a Car Loan and Get a Pre Approval
First and foremost, let me clear things up that applying for a car loan and getting a pre approval for a particular loan is not the same, it is of a different matter.
With that being said, a pre approval car loan involves performing some credit card, credit report, and credit history check on the loan applicant. Meaning to say, the loan applicant is required to submit information and details about the specific car that you wish to purchase to a car dealer.
Getting a pre approval for a car loan allows client applicants or car buyers to spend more time for window shopping and finalize the list of their car choices by determining how much of the loan amount that you can only borrow to make the car payment.
In case you are wondering how long you will wait to get your auto loan pre approved, it actually takes just a minute or two for most clients to fill up the pre approval application form online – and get an answer in just a few seconds!
In some cases, the loan process requires a follow-up via the phone or email to clarify more information before proceeding with auto financing. If that is your case, you will have to wait for a confirmation message that contains what you need to do next.
Once you finally get pre approved, there are no hidden fees or service charges to apply for a car loan online (or on-site). Keep in mind that you as a loan applicant are not obliged to pay for anything until you successfully completed the loan process.