Lenders will not entertain every car loan application that comes their way. If you want to get an approval, then you must come to them prepared. Show them that you can be trusted through a clean history, solid fundamentals, candid answers, and an excellent understanding of the process. The diligence will pay off. Start your journey with the following:
Study the Lenders and their Requirements
Be sure that you know what you are getting into. Learn about different lenders and their requirements. You might be surprised to see some of the items they seek. The earlier you become aware of them, the sooner that you can fulfil them all.
Build a Savings Fund for Your Down Payment
Lenders will only pay for a substantial chunk of the cost but not the entire amount. You will have to shoulder the rest, usually in the form of the down payment. This demonstrates your own financial capability. Save up for it over time.
Clean Up Your Credit History
Your record with past loans will be scrutinised. Impress them by paying your dues on time. Do not take too many debts at the same time. If you have any remaining loans, then pay those off first before applying for the car loan.
Maintain a Good Income with a Stable Job
They will approve your application quickly if they are confident in your ability to pay them back throughout the loan period. Those who are making a good amount every month in a stable job are likely to get a nod. The chances are higher if you have been with your current company for at least 2 years.
Provide an Honest Account of Your Finances
Be honest with your answers when asked about the state of your finances. They will do a background check so they will eventually find out if you are lying.
Get Pre-approved, then Start Shopping
Go to the lenders and get pre-approved for a loan before you begin to shop for your new car. This is an opportunity to discuss your current state and what your lender can provide Once you know how much they can actually give, you can look for models that fit the budget.
Steer Clear of New Debts
Securing the car loan is only the start. You will have to pay this back in increments for a number of years. During this time, avoid incurring new debts that could prevent you from paying your dues.