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If you are unfamiliar with the process of applying for an auto loan, there are a couple of things you need to know. The first thing you should know is that it is possible, and certainly preferable, to get pre-approved for an auto loan before you ever pick out your car. You can do this through your bank, credit union, or another lender. Before you can be approved for an auto loan, your credit report will be reviewed by the lender. If you do not know what is on your credit report, you should get a copy and take a look. Your credit report lists your payment history for unsecure and secure debt, so every credit card, department store card, and loan you have is listed on the report along with your payment history. If you were 30 days late paying your Sears card two years ago, it is still listed on your report today.
Lenders offer the lowest interest rates to borrowers who have the highest credit scores because these borrowers are statistically more liable to pay their payments on time each month. On the other hand, borrowers with lower credit scores are offered higher auto financing rates because they are considered more of a credit risk. Be sure to check out your credit score before you apply for a loan, and you will know what type of interest rate to expect from your lender.
|Sheri Ann Richerson|