What People Want to Know about Car Loans
When you are ready to purchase your next car, you might have some questions. Perhaps it has been a while since you got your last car loan, or you are wondering how your car buying process might have been affected by the recent changes in the economy. Whether you are a first-time car buyer, or someone who has purchased several cars before, you may want to know the answers to some of these questions:
How Long Do I Need to be Employed to Get a Loan?
Every lender has different employment requirements before they are willing to give a loan. There are also other factors that come into play, like your FICO score, length of residence, and your debt to income ratio. If you have pristine credit, lenders might be willing to give you a loan after a shorter length of employment than if you have poor credit.
Can I Get a Car Loan with Bad Credit?
If you know that you have bad credit, ideally you should try to repair your credit first. Paying off a few delinquent debts and making on-time payments for a few months can do wonders for raising your credit score. Also make sure that everything in your credit report is correct, and dispute any errors. If you need to replace your car today and you don't have time to repair your credit, all is not lost. There are lenders that specialize in lending to people with bad credit, but they often charge a higher interest rate.
Will I Need a Down Payment
If you have a good credit score, you may be able to get a car without a down payment. However, the more money you are able to put down, the lower your monthly payment will be, and you also might be able to get a lower interest rate. The more money you are able to pay as a down payment, the less you will be upside down in your car as well. Many lenders recommend that you pay a down payment large enough to cover sales tax and license fees, or trade in a car with enough equity to equal that amount.
Should I Find Out My Credit Score Before Car Shopping?
It is always a good idea to find out your credit score before you begin car shopping. Your credit score will affect the type of interest rate you will get, and you don't want to be unpleasantly surprised when you are applying for a loan. It is also a good idea to check your credit report for errors before you apply for credit.
