How To Increase Your Chance Of Car Loan Qualification

How To Increase Your Chance Of Car Loan Qualification

Posted on June 24, 2021

The vast majority of the people we put forward have a high chance of car loan qualification and are successful. That’s partly down to proper preparation, your hard work and our guidance. But nothing is guaranteed and a lender can turn down your loan application if they see something they don’t like.

Our Cambridge car loan team has put together a quick cheat sheet to help you increase your chance of car loan qualification.

Know your credit score

Knowing your credit score is a fundamental of financial success. Even if you’re not planning on getting a loan for a while, knowing where you are and what your score is means you can move forward positively.

If your score needs work, you have the luxury of time to improve it.

If your score is fine, you can keep doing what you’re doing to keep it that way.

Improve your score if necessary

Your credit score has a significant impact on a car loan application. The higher your credit score, the better your chances of qualifying for the Cambridge car loan.

Now you know your score, you can decide whether it needs improvement or not. If it does, begin right away so you can gain maximum benefit before the application.

Use a credit card, pay everything on time, pay off existing borrowing wherever you can and make yourself look as financially healthy as possible.

Save for a down payment

Down payments aren’t mandatory but they can help. We regularly secure car loans with no money down but having a down payment increases your chances of being accepted.

It shows the lender you’re confident enough to put your money on the table. It also reassures them that you would lose money too if you defaulted and they would lose a little less thanks to your down payment.

A down payment on its own is unlikely to swing a decision but combined with an otherwise healthy application, can make a genuine difference.

Only borrow what you can afford to repay

There’s nothing wrong with ambition or wanting to push yourself. Until it comes to borrowing. Lenders are conservative by their very nature so like to see that you can easilawy afford the loan and aren’t being too ambitious in the amount you want to borrow.

Get prequalified for the loan, use a car loan calculator and make sure you can comfortably afford the monthly repayments over the long term.

You need to check this thoroughly as the lender certainly will!

Prepare your paperwork in advance

Having everything ready for the loan application will not only help the lender make a decision but it can also help them work faster.

This is especially true for income. If you have a salary, that’s simple with salary slips or statements or wage stubs. If you have varying income, multiple income sources or are self employed, your task is more challenging.

The more evidence you can provide of your income, the easier you’ll find it to get the loan. Use bank statements, contracts, pension or rent statements or official paperwork for all your income.

The more evidence you can provide, the more likely you are to qualify for that loan.

When you’re ready for a car lease or loan, get in touch with the Cambridge auto loan experts at Northway Ford for great deals on auto finance.

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