When faced with the daunting task of obtaining a car loan to purchase the vehicle you desperately need, the process can be pretty overwhelming. You might spend an entire day at a dealership and then leave thinking, “what did I actually do for the past 8 hours?” While some auto finance platforms (like, say, Blue Sky Auto Finance) take the guessing work out of the equation, it’s still a good idea to know what’s going on behind the scenes. There are several aspects that go into obtaining a car loan, replete with data analysis and number-crunching. If you are looking into financing a new or used car, take the following steps into consideration when researching a car loan.
Arguably the most important part of getting any loan, including one for your car, is your credit score. Don’t let this scare you, though – a bad credit score will not impede you from obtaining a car loan. It’s more that your credit score will factor into the terms of your auto loans (how much you’re given, what your payments will be, and what your interest rate is.) Staying abreast of your credit is a good way to gauge how much you’re looking at paying when searching for a new or used car.
Determining the conditions of your car loan is a little like this: envision traditional scales, you know, the kind with two bowls on each side that must balance each other. Now envision that there are three, maybe four bowls. Your credit score, payments, interest rate, and down payment all factor into this. If you put more money down, you’ll have less to pay each month. Or, if your credit score is high, you’ll have less to pay each month. Or, if you have a lower interest rate, you’ll have less to pay each month. In addition, extending your loan to last for more years (3, 4, or 5) will also lower the monthly payments. It’s a balancing act, and it’s not the easiest one. (Psst: that’s why we’re here to help.)
Last but not least (the most fun part) is choosing your vehicle. This choice will also play a part in your payments because there is an obvious difference between a used 2001 Toyota Corolla and a brand new 2019 Audi A7. Every vehicle, too, has optional upgrades and add-ons that will factor into the overall price and terms of the loan. When shopping around, take this into consideration and think about how the vehicle itself will play a part in the loan you will get.
We know. It’s a lot of information. The good news? We can help. At Blue Sky Auto Finance, we are there for you every step of the way in getting you a car loan. Whether you have bad credit, want low payments, or just really can’t live without that new BMW – let’s chat. We might have a few tricks up our sleeve.