Month: October 2018
Buying a car is not as simple as it may seem unless you are filthy rich who can buy a drive with ash. It is more than driving it out of the dealer’s.
Buying a car involves taking out a car loan. Looking for a car loan is just the start of the process. There are a lot of banks, dealers and financing companies offering car loans, but getting approved for one is the hard part. Here are the things you have to consider when applying for a car loan.
1. Good credit score
Your credit score tells the bank or lender about your paying habits. It is only natural for them to check if you are a type of person who pays the loan on time and will not default on your responsibility. You can build your credit score by getting loans and credit cards. Always pay your dues on time and you will get a positive credit score to convince your lender that you have a minimal risk as a borrower.
2. Paying ability
When getting a car loan, you are borrowing money that you do not currently have. What convinces the lender is if you have the ability to pay for the amount you are borrowing. Your paying ability is more than just the amount of your salary. It is how stable your sources of income are and your existing financial responsibilities.
3. Complete requirements
Of course, you must be able to comply with the eligibility and documentary requirements. This gives the impression that you are a professional type of person and you have the means to get approved and handle the car loan responsibilities. The usual requirements are your ID documents, proof of billing, proof of income, available assets, down payment and car insurance.
If you have these three factors, you are most likely to get approved for a car loan and get your dream car.