If you’re in the market for a new car, there is a good chance you may need to investigate getting a car loan. Obtaining a car loan is about ensuring you’re a financial risk worth taking for a lender. Here are five tips to help you get your car loan approved.
Have a Good Savings History
If you can show your prospective lender you're capable of putting money away and building up your bank balance, you're one step closer to getting a loan. Lenders ideally like to see a minimum of six months savings history. The amounts contributed don't have to be huge but it displays an ability to budget and save and ultimately meet any loan repayments.
Having a solid credit history that shows you can take out a loan and meet repayments is another big leap in your journey to securing a loan. Lenders love to see that you’ve paid off previous loans without issue in the past.
However, sometimes things don't go to plan but a blip on your credit record need not mean you are ineligible for a loan in the future. This is where it pays to look beyond the banks to lenders like Zoom Car Loans who will take your circumstances into consideration, including past credit mistakes.
It's also worth accessing your credit history and, if there is an entry in dispute, get it rectified.
Long term employment with a steady weekly wage ticks another box for many lenders. Ideally, lenders look for employment that goes back at least a year. You can work around this with more flexible lenders and if you’re self employed, many lenders will accept tax returns or authorised financial statements that show your income.
If you're considering taking out a car loan, look at any other liabilities you may have on paper like credit card debt or other loans. Lenders will be factoring in the sum of your other repayments each week to ensure you are in a financial position to meet a new loan.
If you feel you may be borderline or over the limit, work to lower or eliminate these debts prior to making a new loan application. This will also help you boost your credit rating at the same time.
Secure Your Loan
When it comes to car loans, you can take out a personal loan or secure the debt. A secure loan means the amount you can borrow is leveraged against the value of the car and the lender can repossess your car should you default on payments. It adds a level of security for your lender in that they will be able to recoup the money they have lent you by selling your vehicle if you are unable to pay the loan back.
Getting a car loan is about showing a lending institution that you’re a risk worth taking, whether that’s through your savings history, credit rating or employment. But once that’s achieved you’re a whole lot closer to getting behind the wheel of your dream car. What are some tips you’ve used to get your car loan approved?