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Used Car Loans for First Time Auto Buyers – A Great Way to Begin Your Credit Journey

First impressions last forever and so, does the memory of your first car! There is nothing like owning the beauty-on-wheels. The feel of the steering wheel is exhilarating. The adrenaline rush is simply immense. So, get excited for your first car and start working towards buying an affordable car loan.

Used Car – The Best option for a Young 1st Time Auto Buyer

Used cars cost less than new cars. This means your first car loan will be affordable and within your reach. This is important for building a good credit history. You are building your career and bad credit may ruin your chances of getting low rates on your car loans or any other loans. So, it is better to start small and then, go for the kill.

You are still learning to use a car. It’s better if you practice on a used one and then, buy a car of your dreams.

Why understanding the Used Car Loan Process is so important for a 1st time Auto buyer?

Look before you leap! We have learnt this in school and it’s useful even now. You will enjoy your first car even more when you know that you have landed a great auto loan deal. And, you can only get great deal when you know the entire process of scoring a used car loan.

Without knowledge, there are chances that you will blow a couple of thousands and end up choosing a wrong car loan for your used car. You could end up damaging your credit score without even building it.

Step-by-Step Explanation for Securing a Used Car Loan

Know Yourself

By knowing yourself, I mean know your financials and your credit score.

You must know your financial situation and also understand the constraints. There is a limit of spending and it’s different for everyone. What’s yours? How much money can you spend on payments? Is buying a car the right decision?

Also, check your credit score. There are chances that few of your past transactions have altered your credit score. You must know your accurate credit score so that no lender/dealer cheats you.

Dealer or Private Party? – That’s the Question!

Used cars can be bought from a dealer or a private party. Each option has its pros and cons. You can get more options at the dealer but, you have to tolerate marketing tactics. With a private party, you get first-hand information, but you have to run for completing the paper work. So, take time to decide.

Push yourself and get ready with Paperwork

We all agree that paperwork is the necessary evil. It’s very boring and yet, it needs to be done. If you have ready documents, lenders will not have any point to delay the process of approving your used car loan.

Keep with you –
• Your ID and SSN
• Credit Score and Credit Report
• Bank Statements
• Income & Employment Proof
• Residential Details and Information related to Payment of Utility Bills
• Used Car Details, if you have already chosen a car.

Searching a Lender that offers Used Car Loans to a First Time Auto Buyer

There is a stiff competition in the auto financing world and you can benefit from it. It’s your turn to pick a lender and not the other way round. So, first of all make an online search of lenders that offer used car loans as well as first time auto buyer’s program. Also, check for no credit auto loans because most 1st time car buyers have no credit history.

Once you have a list of lenders and online auto financing companies, choose the reliable ones. Also, go for 100% secure websites only. Apply on the best ones and compare the auto loan quotes offered to you. Comparison should not only be on interest rates. You must consider loan terms, conditions, APR, penalty clause, payment schedules, etc.

Quick Tips for Getting Approval on your Used Car Loan

Start saving money for down payment because it can drastically increase your chances of approval. Also, convince someone with a good credit score to become your co-signer. Most first car loans require a co-signer. It is necessary because lenders have no way of judging your financial capacity.

That’s how you get a better deal on a used car loan. Information mentioned in this article will ensure that you start right on the path of establishing your credit history. Remember the tips because knowledge of the car financing process will set you apart from amateur car buyers.

All the best for your 1st car!

Your Salary Is Not Enough: Get a Used Car Loan

When you first started earning your own cash, you had the power to buy anything you wanted. You probably shopped for gadgets or clothes, or even bought a new pair of shoes you have been eyeing for a month. Sooner or later, you would probably start thinking of buying something more useful, yet expensive, like a car. Buying a car, however, would not be possible only through your salary. Applying for a loan, such as a used car loan, would be your best option.

It is a fact that not everyone has enough money to buy a car with their salary alone. To buy one, it is either they have another source of income or have saved up all their lives. There is another way though, through a new or used car loan. People would likely prefer to buy a brand new car than a used one; however, because of the current situation, selecting a used car is a wise and practical decision.

Used auto loans in a nutshell

Availing used car loans gives people a chance to purchase a car without being harassed of high interest rates and installment fees compared to applying for a new car loan. It is suitable for people who are on a tight budget but are responsible enough to pay their debts. When buying a car, you have to be realistic about what you can afford or not. Used auto loans are secure ways of purchasing a car you need despite the low salary or budget.

Auto loan process online

Go online and you will find many auto loan dealerships which offer new and used auto loans, auto loans for people with bad credit, or refinance car loan. Finding a lender online is convenient and fast because you can compare rates from various lenders by asking for free quotes on their rates. This will help you find great terms and deals you can work with. Once you have found a reliable company, fill out their secured application form with your details to assess your request.

These online companies usually take a few hours to a few days to assess your application. This method is rather fast compared to traditional process of car loans you get from banks and credit unions. Some companies can even get you approved of a loan within minutes. After getting approved, you can choose the car you want depending on the limitations set for you and soon enough, you will be driving your own car.

Refinancing your loan

Some people do not know the purpose of refinancing your auto loan. Whether it is a new or used automobile loan, people can have their loans refinanced after a few months to get even lower interest rates. A refinance auto loan can help you proactively make efforts to lower your monthly payments and save more money during the life of your loan.

Used car loans can help you save the car you want and need without fasting every day saving up for it. You can conveniently manage your money without neglecting your own needs. Find a company which offers auto loans online where the loan process is easier, faster, and more convenient.

An Easy Explanation of Unsecured Car Loans

Unsecured car loans do not require any security or collateral. These loans are usually issued based on your financial standing, your credit history and your current employment and income statements, which determine your potential to repay the loans. Since no form of collateral is being provided, these loans are a little difficult to get approved. Unsecured car loans are considered riskier by the lender as they don’t have anything to sell if they need to recover their loan amount in case of default. To compensate for this added risk, lenders issue unsecured loans at a higher rate of interest.

Unsecured car loans do have some benefits, especially if you do not own your own home. People who are renters can finance their car using an unsecured car loan, as long as their credit score is high enough. Also, if you are a home owner like myself who is not comfortable pledging my house for a car loan, you can use an unsecured car loan. The processing for these loan applications is faster as there is no need for appraisal of the property being pledged.

The interest rate and the term of unsecured car loans are fixed. So you get to plan out the monthly installments and make necessary preparations. Unsecured loans are also provided to people on a pension or people on some type of income support. But there are certain criteria which the borrower needs to fulfill to be eligible for an unsecured car loan. The borrower must be over 18 years of age and should have full-time employment. Normally, there are also minimum criteria for monthly income. In case you are trying to purchae a used automobile, unsecured loans are normally not given for cars which are over five years of age.

Even if you don’t have a perfect credit history, you can still get car loan financing. Actually, a few car dealers specialize in handling loan inquiries for people with bad credit histories. If you want to take out a car loan, then investigate the specialist car dealers and lenders who will conduct a market search on your behalf and provide you the quotes of the lowest available loan rates.

How To Get The Best Unsecured Car Loan

So how to get the best unsecured car loans? The first thing to do is search for lenders who issue unsecured loans. Information about them can be found in auto showrooms or, more easily, over the internet. A good idea could be to speak to friends and family to find out if they have taken a loan in the recent past. They might be able to lead you to good lenders. Once you have found out about them, it is advisable that you invite quotes on the rates and the terms for which they are willing to extend a loan to you. It is only after you are satisfied with the best rate should you decide to go with a particular lender for unsecured car loans.

Before you apply for your loan you should get a copy of your credit report and scrutinize it very carefully for any kind of errors. It is in your best interest to get the errors corrected prior to purchasing your car, as errors may affect your interest rate. The approval of your car loan application will depend a lot on your credit report and credit score. An accurate credit report will help the lender judge your past repayment ability correctly and thus approve the loan if you meet his requirements.

Remember that when you apply for your credit report you should get it from one of the three major credit bureaus. You are able to get a free credit report each year from all three credit agencies. This government agency link can give you more information on the process.

Before you approach the lender for an unsecured car loan, you should make sure that you are not paying more than 30% of your income towards your debts. If a higher amount is going towards your debt, lenders become reluctant to finance your purchase because they are worried that you will have a difficult time making your loan payment. If you are paying more that 30% of your income towards your debt service, not including your mortgage, then it is advisable to pay off the smaller debts so as to reduce the debt to income ratio.

Unsecured car loans usually provide 90-100% of the total amount required to purchase your car. You can use the loan amount to purchase a car of any make or model. It can also be used to purchase a used car, but the intended car should not be more than 5 years old. An unsecured car loan makes sense for many people, so as not to tie up collateral uselessly.