7 Must-Know Tips When Applying for a New Car Loan
Don’t Let Dealers Trick You into Paying More!
Car dealers often take advantage of the excitement of a typical car shopper by tricking them into paying for the lowest down payment and stretching their car loan term for as long as possible to keep their monthly payments low. Although the deal might look good on paper, the car buyer ends up paying more in interest alone.
If you’re planning to get an auto loan for a brand-new car, it’s best to find a financing solution that fits your needs. Otherwise, you won’t be ready to roll when the time comes to buy the car you’ve always wanted.
Here’s How You Can Get the Best Auto Financing Deal
Unless you’ve found the best financing solution, you’ll eventually find yourself wasting a lot of your hard-earned money by the time you drive out of the dealership on your brand-new set of wheels. To help you avoid that, Kids Car Donations shares the following must-know tips when applying for a new car loan:
1. Check your credit score.
Your credit score plays a significant role in determining the interest rate on your loan. It’s based on your credit history, including your payment history, credit utilization, and the types of credit you have.
It’s easier to get approved for a car loan and obtain a lower interest rate if you have a higher credit score. Since this three-digit number represents your creditworthiness, you’ll want to check it to get an idea of where you stand. You can check your credit score for free through various websites and credit card companies.
2. Shop around.
Since different lenders offer different rates, you’ll want to shop around and compare offers from multiple lenders, including banks, credit unions, and online lenders. It’s the best way to find the right deal and save money in the long run.
3. Negotiate for a better rate.
After comparing different loan offers, it’s time to negotiate for a better rate. You can leverage your good credit score or willingness to make a larger down payment.
4. Think about the terms.
Besides considering the interest rate, you’ll want to think about the terms of the loan, including the length of the loan repayment and the monthly payment. While a longer loan term means lower monthly payments, you’ll end up paying more in interest for the duration of the loan. Alternatively, you’ll pay less in interest if you choose a shorter loan term with higher monthly payments.
5. Maintain a low debt-to-income ratio.
The amount of debt you have compared to your income is called your debt-to-income ratio. Your prospective lender will consider this as they evaluate your loan application. For this reason, it’s best to keep your debt-to-income ratio as low as possible by paying down existing debt, increasing your income, or doing both.
6. Make a large down payment.
When you make a larger down payment, you reduce the size of the loan you need. Besides making it easier to get your loan application approved, you’ll increase your likelihood of obtaining a lower interest rate.
7. Consider pre-approved financing.
Since some dealerships and lenders offer pre-approved financing, you can have a clear snapshot of the terms you’ll qualify for before you shop for a car. Pre-approved financing can also help you overcome the urge to overspend because you’ll know exactly how much you have to work with.
You Can Use Your Old Car to Help Sick Kids
Perhaps your garage doesn’t have enough room for your new car. If this is the case, consider donating your old beater to us at Kids Car Donations. We’ll give it a new and worthy purpose that will benefit the needy children and teens in your community who are suffering from serious illnesses and disabilities.
We’ll sell your vehicle through an auction and use the proceeds to support our charity partners’ pediatric healthcare programs and services. These IRS-approved 501(c)3 nonprofit organizations use the funding they get from us to provide their young beneficiaries with free and comprehensive medical assistance, emotional support, as well as access to social services and educational resources.
In exchange for your generosity, you’ll get a free professional towing service from us anywhere in the country. Your gift will also entitle you to claim the maximum tax deduction in the next season. Best of all, you’ll feel immense satisfaction, knowing that your donation can help save the life of a child and restore their health.
We accept nearly all vehicle types, including those that are no longer in good running condition.
To get to know our quick and convenient vehicle donation process and other important details, head over to our FAQs page. If you have inquiries or concerns, feel free to give us a call anytime through our toll-free hotline at 866-634-8395 or leave us a message here.
Start Touching Young Lives Today!
Your car donation will allow you to touch the lives of youngsters in your community who are struggling to recover from their afflictions. Go ahead and call Kids Car Donations at 866-634-8395 or fill out our secure online donation form now!