Car dealers would like you to think that they can help you secure the best car loan rate. However, it is important for borrowers to know what factors influence their approval chances with lenders, so they can shop around with multiple lenders and get the most competitive interest rates. Here are five tips for getting the best car loan rate:
Build a good credit score
Getting approved for the best car loan will require that you have enough income to cover your monthly expenses, including the proposed vehicle loan amount. Car loans tend to be easier to get if you have an established track record of good financial management. If you meet with negative remarks on your credit report, it might be wise financially to pay off debt and start fresh.
Build a debt repayment plan
If you already have debt, it is important to know which debts must be paid first as this will show lenders that you are dependable when it comes to your monthly obligations. However, if you do not have any past credit history or have concerns with your current debt load, car dealers who are looking to earn your business might try to persuade you into financing the new car on an “as-is” basis.
Secure a loan pre-approval
Getting car finance pre-approval can be a great way to speed up the process and hit the dealerships with a set limit of what you can spend in mind. WIth a Driva pre-approval car loan, you’ll receive conditional approval – which means that you’re very likely to end up getting approved for the actual loan. As the pre-approval is based on your income and vehicle details, you can be sure that it is accurate.
Decide what type of loan you’re after
There are so many different types of car finance out there, from standard car financing to peer-to-peer loans. If you’re unsure of what type of car finance is best suited for your needs, it is a good idea to talk to a financial professional who can assess your situation and find the right loan type that fits your requirements. If you’re looking for a car to use for business purposes, you can also consider commercial loan options (and there are often tax benefits that come with these types of loans!)
Shop around
Even if you’ve secured pre-approval, don’t stop shopping around for potentially better car loan rates. In some cases, you can save a significant amount of money by simply making the effort to find the best rate on the market for your personal situation – and it’s worth it!
The above tips will not only help you get a good deal, but it will also ensure that you’re working