How to Obtain a Car Loan

Borrowing money to buy a car isn't hard if you have two things - sufficient income and a good credit rating.

Difficulty: Moderate

Instructions

Things You'll Need:

• Kelley Blue Book
• Consumer Reports
• Consumer Reports
• Internet Access
• Car Insurance
• Car Loans
• Kelley Blue Book
• Consumer Reports

1. Choose your new set of wheels and negotiate a price with the seller (see 'eHow to Buy a New Car').

2. Research interest rates. Several Web sites, such as Bankrate.com, publish surveys of loan rates across the United States. Compare the rates with those offered by your local bank, credit union or car dealer.

3. Find out what your current car is worth as a trade-in. Research values in the Kelley Blue Book Used Car Guide, available at the library, your bank or on the Internet.

4. Determine how much of a down payment you can make. Use your trade-in value and cash - or just cash - to come up with the standard 20 percent usually required. Talk with the car dealer that has the new car you want.

5. Apply where you find the best rates, and the length of the loan and monthly payment fit your budget.

6. Consider saving more for a down payment or choosing a less expensive car if you don't qualify.

7. Build a better credit rating if that's what causes you to be turned down. Try again after six months of paying your bills on time.

Tips & Warnings

• If you lack adequate income or a good credit history, lenders won't approve your loan until you prove you can repay it while meeting your other obligations.
• If a bad credit history prevents you from getting a loan, contact Consumer Credit Counseling Service or a similar group.
• Beware of for-profit imitators that promise to cleanse your credit history for a fee.

[chilamkong]

on 6/13/2009 if i wan to buy a tender car but i dunno bank can approve how much. if let say got the any bank price list then i ll be easy to buy a car n choose it.. so can u tell me how to get the price list from any bank?

[ahoier]

on 12/21/2008 As stated, definately get the loan before car shopping.

Look online and figure out what you want first. Once you got an idea of what you want, THEN go to the dealer, tell them what you want, and ask them for a test drive.

Don't tell them how much money you got until the end :P Gotta beat the pricks at their own business, especially in this economy. Now would be the time to go shopping for cars, since the auto industry is hurting (and well, **** the whole economy as a whole).

Many dealers will tell you their rate is the lowest, because they "buy in bulk" - but that isn't always true. most likely you can get a cheaper loan if you do the legwork yourself.

[stevecards]

on 12/11/2006 See how much of a loan you can get before you shop for a car and don't get hung up on buying a particular car. Being a cash buyer puts you in a stronger position with the dealer.

Also, rates are ususally better at a credit union, especially if you agree to move all your business. Check the membership rules, many are community charter, which means you can join if you live or work in the geographic area the credit union serves.