One of the most exciting things about being an adult is buying a new car. It’s hard to ignore when your local Buick/GMC dealership has the latest models parked right out front, among the flags and banners. It’s an enticing sight, but many potential car buyers wonder if a new car is within their reach.
There are a lot of variables that factor into whether or not a bank will provide credit, including overall credit score, current and past employment status and overall debt load. Figuring out the secret to buying can truly be a complicated process. But here, in easy-to-understand terms, are the secrets people need to know to own a brand new Buick or GMC vehicle currently on the lots in Cranbury, NJ:
A Solid Credit Score
The car-buying process begins with your credit score. Lenders are generally very willing to approve loans, provided that the borrower has a good history of managing their credit. There are several tactics to boost a low credit score, including paying utility bills and rent on time, getting a credit card and not carrying a large month-to-month balance and getting (and paying off) other loans such as mortgages and student loans.
The secret: A low credit score won’t necessarily disqualify a person from getting a car loan. Even if a person has poor or no credit, banks still might be willing to approve a loan if the person is employed, caught up on their bills, and provides good references.
Getting behind the wheel of a new Buick for sale in Cranbury NJ might come down to employment. Lenders want to know that borrowers have the ability to pay back the money. Ability, in this case, means income. People planning to buy a new car should do whatever they can to find and keep a job for at least six months before applying for a car loan.
The secret: People don’t have to have a big-time job to get a car loan. As long as there’s a solid history of employment, the makings of an improving credit score and a relatively low debt-to-income ratio, lenders will take a serious look at a loan application.
After the credit score and employment, lenders look at debt load. They want to make sure that the borrower has enough money left at the end of the month–after paying other essential bills–to make the payment on the car loan. One way to increase the chances of a loan application being approved is to make sure other debts, including credit cards, are paid off before applying.
The secret: Student loan debt is causing problems for younger Americans trying to secure a car loan, but it doesn’t have to. There are government programs to reduce monthly payments based on income.
With all of these factors considered, you will be armed with the knowledge to get approved when you go to apply for an auto loan!