There’s never been a worse time to buy a car. List prices are still well above pre-pandemic levels, and anyone taking out a loan is taking out a high-interest rate, leading to higher car payments and higher overall costs in the long run.
How to Get a Car Loan (The Right Way)
But that’s if you can even get a loan. In June, the auto loan denial rate rose to 14.2%, up from 9.1% in February, according to the Federal Reserve. Fortunately, there are steps you can take to not only get approved for a car loan, but also to get the best loan option for you. Here are tips to increase your chances of getting a car loan now.
To get pre-approved for a car loan, you’ll need to provide proof of ID, income, employment, and your credit history. Gather documents such as your driver’s license, recent pay stubs, W-2 forms, and credit reports from the three major bureaus. Having these on hand will speed up the application process.
Your credit score plays a major role in determining your interest rate and whether you’ll be approved. Check your credit score before you apply for a loan so you know where you stand. If it’s low, here are ways to improve it.
