Picking out the perfect car is the easy part. It’s the financing that can be tricky. But fear not—we’ve compiled some frequently asked questions that will help you get started.
In order to get a car loan, which you can acquire either at the dealership or at a financial institution, you will need to provide your personal information, including your proof of employment and income. You will also need to get your credit checked, which will take into account your payment and employment history.
There are several things that go into calculating the cost of a car loan. These include the cost of the car, whether it’s new or used, as well as what your down payment will be, and what the interest rate will look like, plus the results of your credit score.
The annual percentage rate is the amount of yearly interest that accompanies a loan.
If you want a good deal, shop around. Compare loans from the dealership versus loans from various financial institutions. Check loans online and make appointments to meet with financial advisors in person.
Credit is something that takes time to build, so younger shoppers may be worried that their lack of credit will prevent them from getting a loan. Having bad credit or no credit does not mean that you won’t be able to find a loan. However, it may mean that you won’t get the best deal. Again, shop around and see who is willing to work with you.
This is an important question to figure out before you start shopping. Make an honest assessment of your monthly income and the financial responsibilities you already have. Some people suggest 20% of your income is a good percentage to put towards a car payment. However, it really depends on you and what you’re comfortable with giving up each month.