Advanced technology, stronger competition and more accessible information all make the car-buying process today easier, including getting approved for an auto loan. But some car buyers still find themselves struggling in taking out a great deal. We shared some tips below on how you can ensure an easy auto loan approval process regardless of your credit.
1) Be proactive about your credit.
Finance advisers say that if you plan on taking out a car or home loan, you should get a copy of your credit report at least six months before applying. This is enough timeframe for you to request a copy, examine it, dispute errors, and improve your rating if you need to.
Getting a copy isn’t that hard. The government requires, by law, TransUnion, Experian and Equifax to provide requesting consumers free copies of their credit reports every 12 months. You can make the request through AnnualCreditReport.com.
Aside from your credit report, you should also buy your credit score, the one from a credit-scoring company like FICO. There are a lot of online providers offering free credit scores but experts do not recommend getting these for your auto loan application. Paid credit scores and the like give a more precise idea of your credit and would-be interest rate.
2) Sign the loan with someone.
A cosigner can greatly help you get easily approved for an auto loan especially if you have bad credit. With a cosigner, your business is less risky to lenders. This is why they may lower your interest rate if they see you’re getting a loan with someone.
A family member, close friend, relative or anyone you trust can be your cosigner as long as he or she has good credit. However, be considerate of your cosigner when repaying the loan. Make sure you pay on time so that you wouldn’t hurt your credit and the credit of your cosigner. Make sure as well that your cosigner understands his or her responsibilities well before letting him or her sign.
3) Be patient about shopping around.
While you can get approved for an auto loan more easily, there’s no faster way to find the best lender and the best offer than to shop around. A lot of car buyers hate the practice and don’t just have enough patience for it. Shopping around eats up time, effort, and maybe for some money. But these will all pay off when you realize how much it could help you find the best possible auto loan you could get.
Websites like BBB.com and the city of Los Angeles can help you find legitimate and reputable auto lenders. A word of caution: Too-good-to-be-true offers can be bogus. When you find one, compare it with offers from other lenders before taking it.
4) Get things done online.
Searching for auto lenders in L.A., requesting and comparing quotes, getting a copy of your credit report, applying for an auto loan—did you know that you can do all these online? And by doing so, the process becomes easier, quicker and hassle-free.
However, we want to remind you that you should see the lender personally at least before signing the loan contract. Never finalize any deal without meeting up with the lender first. While online transactions are easy and convenient, they can also be risky as the entities are usually anonymous.