Friday, 24 May 2019

How To Get a Car Loan For a First Time Buyer

I got another article today that I really want to talk about because we're talking about another really important type of loan and that is an auto loan. Car loan next to house loans are normally like one of the most expensive types of loans due to the amount of the car, plus the interest that you pay, I mean, most people pay tens of thousands dollars, we want to make sure we're getting the deal possible.

Let Get Started

You want to buy a car, well, what do I do next, what's the first step to take and the logical thing would be like start looking at cars, right, and it seems that it would make sense but at the same time, I would actually pause here and say let's take a look at the money side of it before we even start looking at cars.

Have you sat down and found out 
  • How much you want to spend 
  • How much monthly payment you can afford
  • How long would you like to take to pay this loan off
I mean to me these are just important as finding out what car is right for you. Car loans can get real expensive real quick if you don't pay attention to this stuff a car loan can quickly become a debtors prison and cost you years of financial grief. I promise you your new ride isn't nearly as cool when your credit score sucks, you'll realize you've wasted thousands of dollars and your monthly payment is killing you. We need to make sure that does not happen

1. Find Out How Much Do You Want To Spend?

This is the number one priority, you need to find a car that fits your budget, you don't want to be irresponsible and find a way to make your budget fit a car that you really really want, that's not the way you want to go with this. Find out how much you like to spend and here's the thing, when you find out what that number is, don't go past it, stick to that number, if you are looking at cars and find something that's higher than what you want to spend, just forget about it. This car is probably not going to be your forever car 

2. Who Is Going To Give You Loan

Find out who's going to approve you for this loan, this is really important because every bank and every credit union they all have interest rates for their loans and we know that interest rate is super important to our personal finance. You want to make sure that your interest rate is as low as possible, don't assume that you get a loan with whatever financial institution you used right now, it would be in your benefit to go online, do some research what interest rates do the banks and credit unions offer you. Hopefully, you found a financial institution that offers competitive rates and once you have found that place you're pretty much to ready to apply, this is called the pre-approval process and it's really simple you are just telling this bank that. hey, I don't know what I want to buy just yet for a vehicle, but I just know that I am, I  know that I am going to need a loan and I don't want to spend more than X amount of dollars, and I want to make sure that you guys can help me out. Very simple

This way you know that you're approved for this loan before you even step foot on a dealership. This is going to make your life so much easier. Whether you get approved for this loan is going to be determined by a few things. Things like

  • Your Credit Score
  • Your Income Level
  • Your Current Level Of Debt
  • Your Down Payment Amount

All of these factors will heavily determine whether you get approved or not for the loan. Another thing, when you put in this application and they pull your credit they're going to tell you what your interest rates are and that is really important because now you can start finding out how these loans would look like in the long run.

Find A Balance

My advice to you would find a balance, you don't want to finance a car for too long because if you do that you're going to pay way too much in interest.

3. Finding The Right Car For You

The frustrating part and that is finding a car that you like and make financial sense, luckily I don't need to talk about cars and what makes one car better than another all I really care about is making sure you get a good deal! I can not stress how important that is, is really simple but so many people make this mistake when they're buying a car. Make sure the amount that you agree to pay for a vehicle is very close to what the car is actually worth. I mean it's simple right, you would think so but honestly car dealerships and their salespeople I mean they're very good at what they do and part of that is making you fall in love with the car and making you pay way too much for it.


When you go in to apply for a loan if you let the financial institutions know. Hey, I know what I am looking for, I know what it's worth, I've done my research. They are going to be a lot more willing to approve you for this loan because an educated buyer is far less risky than an uneducated one.

No comments:

Post a comment