Tips for Securing an Auto Loan

Posted Friday, Nov 14, 2014 by nhtwpprod

Image via freeimages.com/ Penny Matthews

For many people, securing an auto loan is the thing they are most nervous about when visiting a Los Angeles Toyota dealership. Having a car is a necessity for most people, but it's also a serious financial commitment, and most don't have the money to pay the full value up front. Buying a new or used car also means taking out a loan, and, with times as tough as they are, many people worry whether or not that's something that they can afford.

If you're in the market for a new car, but not sure what you can afford in a Los Angeles car loan, there are several steps that you can follow to determine what kind of loan you are eligible for, and then to make sure that you will be able to keep up with it.

Check Your Credit Reports

One of the most important factors used to determine the rate of a loan is the buyer's credit scores. Knowing what your credit score is before you attempt to secure a loan will give you a good idea of what information the future lender will see, and let you predict what amount and rates you will qualify for.

It's also a good idea to request your personal reports from each of the three credit reporting agencies (Experian, Equifax, and TransUnion). Sometimes one or more of these agencies will have made a mistake on your credit score, which can end up costing you a lot of money if not corrected. You never know which agency the dealership is going to request a report from, so even just one of the credit agencies making a mistake could be disastrous.

Consider More Than the Monthly Payment

When signing up for an auto loan, many people only consider the monthly payment when securing choosing their financing options. "If I can afford the payment every month," they reason, "then I can afford the loan." While being able to afford the monthly payments is important, it's only a part of the picture. Choosing the lowest payment per month often means choosing the longest payment schedule, which can end up being a bigger financial burden in the long run than the other options.

A longer loan with lower monthly payments will sometimes be the right choice. However, that doesn't mean you should automatically accept it. Consider your options and talk to your dealer about what's on the table, and then make the decision that makes the most sense for you.

Don't Ignore Dealer Financing

If you're not finding the deals you want on your auto loan from your bank, then securing financing from your car dealer is an option that you shouldn't ignore. Dealers often have specials like 0% financing and low APR offers available, and working with your dealer to secure your loan can end up saving you money.

By being informed and knowing what to look for, securing a car loan becomes a much easier, less daunting task. North Hollywood Toyota's friendly dealers can help you consider your financing options and choose an option that fits your budget and lets you take home a new car. To learn more about our cars and our financing options, call our sales line at 800-800-6730.