When it comes to applying for a car loan, it’s important to know what kind of loan you should be looking for, and how much you have budgeted out to spend.
This is a good reminder that paying off a car loan is more like a marathon than a sprint. Preparing yourself for the car loan options that are available, and which one will be best for you and your family, will ensure that you secure a loan that is best for your financial future.
Here at Canadian Auto Brokers, our top priority is helping you get the right financing for their circumstances, so you can get into a new car that you love. One of the main steps we take to do this is spreading education about what you need to know/do before applying for a car loan, and why. With these goals in mind, we’ve put together an easy car loan application list for you, so you don’t overlook anything important.
Outline Your Budget
Giving your financial position an honest and thorough assessment before you begin applying for car loans is a key step in getting the best auto loan rates for your budget. One of the best ways to give yourself both certainty in what you can afford, and the flexibility to explore different options, is to calculate a budget range that you can work within.
Monthly Payments: These payments will be your main touchpoint with your car loan throughout the life of it, so ensuring they land within your budget range is key. By making each monthly payment, you can actually increase your credit score, and refinance your loan for lower rates or payments while still paying it off with no penalties.
Understand Credit Scores
Understanding your budget range is your way of getting a grasp on what kind of car loan that you can afford, but you also need to understand what kind of car loan lenders are going to offer you. Your credit score is just one of many factors that will dictate the interest rates that lenders will extend to you, with a better score usually leading to lower interest rates.
One thing to remember is that a credit check will actually lower your score a small amount, so it’s best not to shop around or apply for credit. Brokers are trained on which banks offer the best rates to certain types of applicants and so they can check your credit once, and then go to all of the available lenders on your behalf.
Over the long run, higher rates lead to higher costs, so if you need a car loan with low or bad credit, you want to ensure you’re working with someone who has your best interests in mind and will work to get you the best possible rate–before applying for a car loan.
Refinancing Your Loan
The number one balancing act to figure out when determining your options involves the size of monthly payments you’re making and the length of your loan term. Depending on the interest rate that you lock in, the amount you’re paying each month, and the amount you’ll pay for your car loan in total, can vary.
Refinancing your car loan is the best way to benefit, in real time, from staying on track with your loan payments. Specialists like Canadian Auto Brokers will help you get the lowest refinancing rates possible, different from most dealership financing.
We will ensure you get an auto loan that works within your financial landscape, rather than just tying you to the first loan that finalizes a sale.