Buyer’s Guide: How to Finance a Car

Having your own car is pretty important. Whether you need to commute to work or run errands, having your own car makes things a lot easier. That said, cars can also get quite expensive. Fortunately, you can get a car loan to finance your purchase. Here’s how to go about the process. 

1. Review your credit score: Like it or not, lenders decide your loan rate based on your credit score. So, if you have a good score, you’ll be able to get some excellent offers. If your score is in the fair to poor range, you may want to hold off on buying a car and work on improving your score. 
2. Decide your budget: Before you start shortlisting cars that you could possibly buy, you should set a budget. There is, after all, no point looking at luxury SUVs unless you can afford one. 
3. Learn the lingo: When you are shopping around for car loans, you’ll notice that lenders use industry-specific lingo like finance charge or loan term. If you don’t know what these terms mean, it could get a little overwhelming to figure out which loan is the best. So, it’s a good idea to learn some commonly used terms. 
4. Research your financing opinions: Like with any loan, car loans are offered by financial institutions, like banks, credit unions, etc., and auto dealerships. It’s important to get quotes from multiple lenders by applying for pre-approval, so you are able to make an informed decision.
5. Don’t focus only on the monthly payments: While it’s important to check the monthly payment so you know whether the loan is affordable, make sure to also check things like the interest rate, terms of the loan, and other fees that may be charged. 
6. Complete your application: Once you find a loan that’s right for you, submit whatever documents are required by the lender and complete the paperwork. Just ensure that you read through all the terms first. 
7. Set up automatic payments: It may get challenging to keep a track of your monthly payments, so you may want to set up automatic payments. This will ensure you never miss a payment.

And, that’s all there is to it. You can drive off in your new car once the loan comes through!