When you're in the market for a new car, you can either pay for the new vehicle with cash or you will need to take out a car loan. Getting a car loan isn't as difficult as it may seem – but we're here to walk you through the steps of how to get approved for a car loan quickly and with the best rates possible!
How to Get An Auto Loan in 3 Simple Steps
When you're looking at how to apply for a car loan, you will need to check your credit report, apply for auto loans from multiple lenders, and get pre-approved for the loan of your choice.
- Check your credit by using www.annualcreditreport.com or by contacting your bank directly. All car dealers will check your credit before offering you any finance options, so it's good to know your score before going into the dealership. On average, the credit score needed for a used car loan is 657 and 721 for a new car loan. In order to get an auto loan at a low-interest rate (around 6% or lower), you will want a credit score of 700 or higher.
- Apply for an auto loan from multiple lenders like a notable bank, credit union, or online lender to find the best possible rate. If you work with a dealership like Bob Penkhus, they will help you discover the financing options that will be best for you. Compare the quotes you receive from at least 3 different lenders and be sure to look at the APR, loan term, down payment, and any taxes or fees they may charge.
- Get pre-approved for an auto loan you're considering before purchasing your vehicle to give yourself leverage with the dealership you are working with to find a car within your budget. Pre-approval shouldn't be confused with "pre-qualification." Pre-qualification for an auto loan requires a "soft" credit pull by pre-approval will require a "hard" credit pull (and will temporarily lower your credit score). You will want to get pre-approved because it will give you a specific interest rate offer from your lender. (Borrower Note: If you apply to all your pre-approval lenders within a two-week span, the "hard" credit pull will be counted as one inquiry rather than multiple accounts. This will guarantee the best interest rates and give you more negotiating power in the dealership!)
How To Buy A Car With No Credit
Do you ever wonder how to get a car with no money or no credit? It is possible to get a car loan with nearly any credit score – you just need to keep in mind that it may cost you in high-interest payments unless you work with a trusted dealership, credit union, or bank to get you a lower rate. If you have no credit history and have never borrowed before it may be difficult to get a car loan – but not impossible. You can make a larger down payment, get a co-signer, or get pre-approved for a car loan and build your credit as you make your monthly payments.
Car loans don't have to be scary – our team of vehicle experts can help you discover the best financing options available to get you behind the wheel of the car of your dreams at a price you can afford. Contact us today to schedule an in-person or virtual appointment, test-drive, or car servicing. We're always here and happy to help!
- Your friends at Bob Penkhus Mazda
