Can I Get A Car Loan Immediately?
Before you find a car dealership in Elkhart, IN, or anywhere else, you may be wondering about the car financing process and how easy it is to get a car loan. Truthfully, the difficulty level of getting a car loan will depend on many factors. As an example, if you shop with a dealership like USA-1 that offers buy here pay here near you, your car buying process will be incredibly streamlined. On the other hand, if you shop with a new car dealership, it may take a while to get approved for an auto loan. Because of this variation in difficulty, we at USA-1 have compiled a list below to help better your understanding of car loans and how to get them immediately.
1. Auto Loan Pre-Approval
One of the easiest ways to ensure a short financing process while shopping with USA-1ís car dealership in Elkhart, IN, or anywhere else is to get pre-approved for an auto loan. Pre-approval is a simple process that can save you a lot of time at the dealership. All you must do is speak with a lender, and they will ensure that you meet specific financial terms. Next, the lender will give you some conditions and a set limit that you can spend on a loan based on your financial eligibility.
2. Determining Loan Eligibility
Most of the time, typical car dealerships in Elkhart, IN, or wherever you may be, will use credit scores in determining auto loan eligibility. With this being said, credit scores usually influence many factors and terms to do with financing a car. Overall, the better your credit score, the more benefits you will receive while shopping for a new or used car near you.
3. Credit Tiers
It was previously mentioned that most Elkhart used car dealers and dealers everywhere else utilize credit scores in deciding who qualifies for an auto loan. Among these credit scores, dealerships use five different credit tiers, which are a range of credit scores, to determine financial eligibility. The terms and rates of an auto loan will heavily depend on the credit tier in which your credit score fits. In the following list, you can see every credit tier along with the scores and average interest rates associated with them according to Experian:
- Superprime: 781-850 3.61%
- Prime: 661-780 5.38%
- Nonprime: 601-660 9.8%
- Subprime: 501-600 15.96%
- Deeper Subprime: 300-500 19.87%
If you fall below the subprime credit tier, you may have trouble getting approval for an auto loan. Fortunately, dealerships that offer buy here pay here near you cater directly to car buyers with little to no credit.
4. Buy Here Pay Here Car Lots
As mentioned above, dealerships with buy here pay here near you are an excellent solution for financing a car with poor credit. In order to accommodate low credit buyers, buy here pay here dealerships use factors other than credit scores to determine eligibility for an auto loan. If you browse the list below, you can see a few of the most common factors used by these dealerships:
- Income-to-debt Ratio
- Employment Status
- Living Situation
5. Improving Your Credit Score
Suppose you have a poor credit score, and you are having trouble qualifying to finance a car for sale in Elkhart or anywhere else. Or perhaps your credit score is just shy of the next credit tier. If you are in either of these situations, you likely want to improve your credit score. Lucky for you, there are plenty of simple ways to increase your credit score, and a little information can go a long way in setting your credit on the right track. Below, you can find some useful tips for improving credit to help further your chances of getting a car loan in a timely manner:
- Pay past-due/delinquent accounts
- Decrease revolving debt
- Timely pay bills
- Ensure an accurate credit score by checking your credit report
- Keep old accounts open
- Limit credit and loan requests