Car has become one of the very important and convenient means of transportation. Today, car is not luxury anymore, but it is a necessity. Potential buyers may go for pre-owned cars or new cars. Majority of buyers with mid-income would go for financial options to purchase the car. Banks and finance companies depend on the borrower’s creditworthiness before approving the auto loan in Wichita, KS. Buyers with bad credit history may find it very difficult to get a loan. But this is not the case today, because buyers with poor credit score or history can also obtain auto loan with the help of some basic tips now.
1. Increase your down payment: Down payment is the sum paid during the purchase. Buyers can obtain the auto loan in Wichita, KS for whatever amount is left after the down payment. Borrowers, who are in high-risk category, should consider increasing their down payment amount to increase their chances of getting loans approved. Down payment amount is equal to the risk accepted by the finance company inversely. When the amount of down payment is higher, the risk taken by the finance companies would go down. So, the chances of getting loan are more. Another advantage of increasing the amount of down payment is that the borrower will end of paying lower interest rate.
2. Collateral: If the credit history of the borrower is very bad, then financial institution may ask the borrower collateral security. Collateral means an asset guaranteed against the auto or car loan. Giving collateral when demanded lowers the chances of obtaining approved auto loan in Wichita, KS.
3. Distribute the loan application: Potential buyers must keep their eyes open for every opportunity that is available. Potential buyers should apply for the loan in as many financial institutions as possible. One should look for help from individual lenders, brokers, car dealers and finance companies. Chances of getting approved loans increases when you apply for more than one institution. It also helps the borrowers to understand the interest types that may be offered to them. One should remember that every application includes the process of credit check.
4. Look for credit report conflicts: Credit report is very important for determining the applicant’s creditworthiness. Borrowers should check their credit reports carefully for any conflicts. One should make sure that all conflicts and disputes are resolved before putting an application for any kind of loan.
Criteria for approval of loan for first time buyers
1. Employment: Employment or your job is very important for getting auto loan for first time buyer. You can be hired full time or part time, but you definitely need a proof of your employment. You can present your recent pay slips as a proof. You can use your tax statements as a proof if you are self employed.
2. Income: Employment and income are related to each other. When you have a good job, you will have a regular income. Majority of lenders want you to earn a minimum of $1000. This number varies depending on the lender. Income is a very important criterion as you can make payments regularly to the lender when you make enough money. If your income is not enough to clear off your expenses, getting an auto loan is not recommended.
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