A car loan and the payments that come with it are almost inevitable. It is possible to go for a short while—maybe even a few years—without car payments, but the time will come when you need a new car. So, it is an excellent idea to have the lender in mind. This way when you are ready, you can go straight to the bank or finance company and arrange your personal car loan.
Difficulty: Moderately Easy
Take a good look at your credit rating. Use a free copy of your credit report (obtained online) to decide what type of personal car loan you want to make.
Shop until your heart's content. Decide if you want to buy a new or pre-owned car. Think about what you can afford. Arrange for comfortable loan payments.
Choose the lender you want to use according to the age of the car you are buying. Your bank may have better interest rates than finance companies, and you should be able to finance cars up to five years old at either of these options.
Pick from a variety of websites and newspaper ads that promise to get you a car if you have had some credit bumps. There are loan companies that will finance challenged credit at a higher interest rate than if you had good credit.
Use your computer to fill out the application online from your vendor (if they offer this option).
Ask the lender to take faxed copies of anything they need so that you can have as much done as possible before meeting with the car dealer. Fax these document copies to the dealer.
Go to the lender (or the dealership's staff member representing the lender). Sign all of the paperwork you still need to take care of then take possession of your new car.
Tips & Warnings
- You may be able to choose how long you want the loan to last (from one to five years—and six is not unheard of) with certain lenders.
- This is a personal decision, but other people will make it for you. It is up to you to keep your best interests in mind.
- Be aware that the interest and total price for the car is much higher with challenged credit than you will pay with a good rating.
- If you want to buy a new car, you will need a good credit rating.