Getting That Auto Loan

Getting approved for a loan is always the ultimate goal when you apply and it can be tough if you don't know the ropes. Several alternatives can make it easier for you though. You can always go the bank or credit union route for approval. This process of course will scrutinize your credit rating closely. It will greatly improve your chances of going through if you have steady income, a good job history, and a favorable credit report.

It's not secret that sometimes choosing how the car is going to paid for can be more difficult than choosing the car itself. What makes it so difficult is there are what seems like an endless array of financing options to choose from. Some options are going to be good, and others are not going to be as favorable. You can either end up with the car of your dreams, or you can walk out with a loan deal that will leave you upside down-thus affecting your financial peace of mind for years to come.

First Things First, Budget!

Before you go to the car lot, do an honest budget. Calculate your net income (what you actually bring home after taxes and other deductions) and deduct all your bills and see how much free cash you have per month. If paying for a car and insurance will leave you at zero available cash for an emergency, you need to budget a little harder and cut financial corners where you can.

So you think you qualify for that beautiful car on the showroom floor? Think again...very carefully. Even though you may be told that the numbers indicate that you qualify, you still may not be able to afford it. This is where honesty should take center stage. Your thoughts should be centered on what the monthly payment is going to be, and how you're going to make the payment each month. Be patient, go through as many offers possible before committing. The real prize will be to walk away with the car of your choice and a low-interest loan to pay back.

If you belong to a credit union, this should be a good place for you to start looking. Credit Unions can offer some great rates for members. Another option is to go online. The loans are about as diverse and numerous as the websites themselves. There are a lot of competitive deals to be found. Online shopping only takes a moment of your time, and based on your present credit, may be able to give you a better deal than a dealership can.

Then there is the dealership car loan. A lot of people will warn you about this route, and often with good cause. But, if you do your homework and walk in with options in hand, you will be negotiating from a position of power. Make sure you're up on any dealer rebates as well. In the end, dealerships know they have a great deal of competition, and will do what is necessary to make the loan go through.

There will of course be those of who don't want to commit to a lengthy car loan deal. For the chosen few, there is always the leasing option. You may find your payments to be a lot lower, because you actually wind up paying for depreciation, and not equity. Be careful on this one so that you don't end up with overpayment for overage fees, which can sneak up on you. Do the homework, and you'll come out the real winner.

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About the Author Liz Roberts is a loan consultant with NewHorizon Finance and has been providing consumers and business owners with financing since 1989. Bad Credit? Join our mailing list for tips on building and repairing your credit yourself, without hiring a credit repair service. Click here for a list of bad credit unsecured credit cards Free reprint rights with full credit to the author. Please reprint everything within this box. Copyright 2006