Tips to get approved for your first car loan
Buying your first car is a major milestone, up there with starting work and getting your first paycheck. But while it’s exciting, it can be a daunting prospect – particularly when it comes to car loans.
You don’t want to get knocked back when you apply for finance as that could damage your fledgling credit score. So what can you do to improve your chances of getting the green light on your first car loan?
How to get approved for a first car loan
Start with your numbers
It’s easy to get carried away when you’re looking at cars. After all, who doesn’t want to own a fancy set of wheels? But buying your first car shouldn’t burden your finances. So you need to know how much you can afford to borrow before you take your first test-drive.
Use our car loan calculator to help you figure out how much your repayments are likely to be so you can set yourself a realistic budget. Remember to include running, maintenance and insurance costs in your sums, as well as a buffer to cover unexpected expenses and emergencies.
Check lenders’ eligibility requirements
You don’t want to be rejected for a car loan. It’s painful. And it can damage your credit score, making it harder to borrow money in the future.
So ask yourself: ‘Am I eligible for a car loan?’
To find that out, you need to research lenders’ eligibility requirements. Bear in mind that different lenders have different requirements, so it’s usually a good idea to get an experienced car loan broker like National Loans on board.
With over 30 lenders on our panel, we don’t just find you loans you’re eligible for but also get you the right deal that matches your needs and budget.
Save towards a deposit
While saving for a deposit for a car loan isn’t always necessary, it’s definitely a good thing to do. The bigger your deposit, the less you’ll need to borrow – which means lower monthly repayments and a greater chance of approval. Win-win.
Know your credit score.
Before you apply for any loan, it’s always a good idea to check your credit score first. Why? Because that’s the first thing lenders do when they assess your application. The better your score, the more likely you’ll get the stamp of approval.
So, if your credit score is low, try to improve it by paying down debt and clearing outstanding bills.
Compare, compare, compare
There are hundreds of car loan products available in Australia. So how do you figure out which is the right deal that best suits your needs and circumstances? By knuckling down and doing your research first. Alternatively, get an expert car loans broker like National Loans to do the hard work for you.
Limit your applications
As tempting as it may seem to cast your net wide by applying for multiple car loans, don’t. Every loan application will be recorded in your credit history, potentially dragging down your credit score and making it more difficult to get a loan.
Wondering how to get a first car loan? Get the guidance you need by filling in this online form or contact National Loans on 1300 358 358.