How to Get a Car Loan

There are a few steps you need to follow in order to get a car loan, and it can actually be pretty simple. Explore the steps with Ocean Honda Santa Cruz and get yourself on the Aptos roads in no time:

Get Your Credit Report

It’s important to check your credit score before you apply for a loan. A high credit score will give you the freedom to get a bigger loan and lower interest rates. It’s highly recommended that if you have a credit score of 600 or below to spend time building a better credit score.

Apply for Loans Through Different Loaners

Once you check your credit score you should begin exploring loans and lenders. There are a few places you can look: larger national banks, local banks or credit unions, online lenders that specialize in auto loans, or dealership loans. After checking for the first three, compare those, and the dealership loans. If you plan on getting a loan from the dealership you will still want to compare the other loans to get the best price possible.

Get Loan Pre-Approval

When you are getting ready to compare interest rates, which have a lot of variation depending on how the lender weighs your credit score, it is important to get preapproved for your loan. You may have heard of pre-qualification: this process involves a soft-credit pull and minimal personal information to give you an estimated rate. Pre-approval, on the other hand, is a “hard pull” and can affect your credit score temporarily. Pre-approval can be advantageous as you go into the car buying process because you will be protected from higher dealership interest rates.

Budgeting

Getting preapproved provides you the information about the maximum loan amount you can receive. This does not mean that you need to use the entire loan. You can use just part of the loan. It’s important to note that there are taxes and fees you will need to pay when you get your vehicle and that should be factored into your consideration. Your current vehicle’s trade-in value is also beneficial in lowering your purchase costs. Make sure you are considering how much you are willing and able to pay monthly.

Choosing Your Car and Reviewing Dealership Loan Offers

Once you have begun exploring and test driving your new or used vehicle, make sure to confirm the loan offer for: excluded vehicle brands, requirements from the dealership, lender requirements, and time restrictions. Once you speak with the finance team and they find out about your pre-approval the finance department will very likely try to beat the rates provided.

Finalize Your Loan and Make Payments

It’s always good to read through your contract so you are aware of any hidden fees or longer terms or additions you weren’t looking for. Making on time payments is crucial and can be done with a simple automatic payment plan.

Come Visit Ocean Honda Santa Cruz

When you have done your research and want to explore some vehicles, come to Ocean Honda Santa Cruz. We can help you get the financing you need to purchase your new or used vehicle. We are happy to help you with anything you need!