Posted Monday, Apr 24, 2023
On the surface, getting approved for car loans can appear to be tough, especially if you’ve been turned down before. However, used car dealerships like Royal Auto Dealer make it relatively easy to get approved for your loan application because of their relationships with lenders throughout Los Angeles.
Here are a few tips to help you get easy approval for your loan application.
Not to beat a dead horse, but increasing your credit score is the best way of getting easy approval for a car loan. The credit score is a number that is based on how you’ve handled credit in the past. It considers factors such as how much you’ve borrowed in the past, the number of loan applications you made, and whether or not you paid your loan on time.
A higher credit score will put you in a better position to secure a car loan (and with interest rates in your favor). You could get a free credit score from major reporting companies like Equifax and TransUnion.
It makes sense to increase your credit score before approaching lenders. Lenders use your credit score to assess their overall risk in lending to you. For obvious reasons, lenders want to minimize their risk and may offer a high-interest rate if the credit score isn’t up to par.
The good news is that you can improve your credit score by paying your bills on time and displaying any errors in your credit report. Once you have improved your credit score, you will be in a better position to look around for the best lender at the best interest rate.
Having a bad credit score doesn't have to end your car-buying ambition yet. If you would like to know more about easy approvals, you can get in touch with the friendly team at Royal Auto Dealer.
Buying a car, new or used, will cause major changes to your budget. Before adding on the responsibility of buying a car, you should carefully consider your income and expenses. If you are unable to make any wiggle room for interest payments for the used car, then you may want to make adjustments to your expenses.
Make sure to consider both the upfront costs of the transaction (including any down payment and sales tax) as well as miscellaneous expenses such as:
● Registration
● Insurance premiums
● The monthly payment for the car loan
As a rule, you should try to make a 20% down payment on the car to be able to pay the loan back within 4 hours. Making a big down payment also means that less of your monthly income will be spent on interest rates.
If you’re able to afford payments on the car you’re applying for, you may be able to have someone cosign a loan with you. A cosigner can help you because lenders also include their income in factoring in your application. Don’t worry; the cosigner doesn’t have to be living under the same roof as you.
It is worth noting that the cosigner must demonstrate a good employment history, credit history, and stable income. You may also be able to use a cosigner to compensate for your credit score if it isn’t up to par. In general, lenders are much more comfortable having a cosigner on board because it increases the likelihood that you’ll pay them back.
Do keep in mind that the cosigner is now on the hook for both the financial and legal repercussions that come with signing the auto loan. Should you default, the lender could go after the cosigner for the amount you borrowed. Also, making late payments will affect your cosigner’s credit score.
If you are unable to qualify for the car you want, you may want to opt for a less expensive and slightly older model instead. This car will be less costly with fewer features and more mileage. Finding a less expensive car is a great way of getting your loan approved. It also means that you will own the car sooner than later because it is cheaper.
Getting pre-approved for a car loan before visiting the dealership gives you more bargaining power. A pre-approval essentially means that the lender has given you an agreement in principle to finance your purchase. It is like a credit check in that the lender will closely evaluate your ability to repay the loan.
The lender will look for various details, such as:
● Whether or not you have other loans, including personal loans
● Your monthly bills and expenses
● Your credit reports
● Overall risk profile
● Total loan amount
Don’t be afraid of taking your time to look around the internet. Try to create a list of cars that you can afford. A lot of factors go into the pricing of a used car. Not all used cars are priced accurately, and you may want to do your research before buying the car. It isn’t uncommon for dealers to jack up the price of used cars.
Try to get the car inspected and obtain its history report to get as much information as possible. Once you’ve created a list of cars you can afford, you will have a good idea of what you want and
a rough idea of the market price. You can use this information to quickly secure the right car and negotiate a fair deal.
It is worth noting that used car inspections can be a bit pricey. The good news is that Royal Auto Dealer provides reliable cars for your peace of mind.
Get approved for an auto loan today by getting in touch with Royal Auto Dealer here.
