If you have been shopping for a new car recently, you may still be suffering from sticker shock. In today’s world, you need many thousands of dollars to buy the car of your dreams. Unfortunately, this also means you will need to obtain a loan that is for a substantial amount of money. While getting approved for a high car loan is not easy, it is certainly not impossible. To get approved for a higher car loan, keep these tips in mind.
Improve Your Credit Score
When a bank or dealership’s finance department considers giving you a loan, they place a good deal of emphasis on your credit score. If your current score is 600 or lower, you probably won’t get that higher car loan you need. To improve your credit score, check your credit reports and correct any errors they contain, reduce your debt, and pay all of your bills on time. If you do this, you can have a much higher credit score in as little as six months.
Consider Using a Cosigner
If you have a low credit score, adding a cosigner to your car loan may be what ultimately gets you that higher car loan. When you do this and add someone who has great credit, the lender assumes much less risk in providing the loan, making them more willing to take a chance on you. When choosing a cosigner, always make sure they can handle this financially and are aware of what comes with being a cosigner on a loan.
Work with a Lender Who Knows You
If you have a credit union membership, take advantage of this when seeking that higher car loan. Many times, working with a lender who already knows you can give you a distinct advantage over trying to obtain financing at a dealership. Also, credit unions often have a variety of loan options, many with lower interest rates.
Make a Large Down Payment
When you need a higher car loan, being able to make a significant down payment on your vehicle will always put a smile on any lender’s face. Making a large down payment at the beginning will show the lender you have the financial resources available to pay back a larger loan amount.
Though you may be in debt for several years once you obtain that higher car loan, the good news is that once you get the loan, you’ll be driving down the road in the car you’ve always wanted.