The first consideration is what kind of vehicle you are looking to buy. Purchasing a new or used car, truck, or even a motorcycle will put you in different categories with the auto loan companies that they deal with.
What are First Car Loans
First, let’s review what a first car loan is. A first car loan is the same as any other type of loan but is given based on the condition of your credit and your down payment on the vehicle. Upon review of these elements, you may be accepted for a thousand dollars or $20,000.00. The amount you receive will be based on how much equity you have in other vehicles and your open lines of credit.
First Car Loans with Bad Credit
The first step is to contact at least three auto loan companies and obtain a car loan with bad credit. All lenders are different and have various car loan requirements with bad credit because this could expose a lender more to risk or keep them from losing money. The real key for first car loans with bad credit is to know what your current situation is and be realistic. You have a better chance of getting a loan if you make your payments on time while reaching terms that both parties agreed upon. Those terms will include the interest rate, down payment amount, term, length of time that the loan will last, and any other fine print that may apply.
Advantages of First Car Loans
The advantages of first car loans are many. You can often get a great interest rate even if you have what would normally be considered bad credit. Getting a great interest rate on your auto loan is a great advantage of first car loans because it enables you to afford the car you are looking to buy without worrying about how the payments will affect your current situation.
- If you have bad credit, you may not want to use your own money saved up or keep it in a bank as an investment.
- Bad credit may be preventing you from getting any other type of loans, especially since they all tend to run a credit check as part.
- That open line of credit could have high fees and even be build up with fees, so it could save you money by just canceling it and using another one for your car loan instead.
The one major difference is the cost associated with first car loans. Many charge more upfront, whereas a credit card could be wrapped up in the made monthly payment. This is why it is important to decide what you want out of your car loan based on how much money you can realistically afford to spend and will be able to pay on time. It would help if you also thought about your short-term goals and your long-term financial opportunities. If you can save enough money, you may be able to take advantage of buying a new car, but if your auto loan now, then you could buy a used car and even pay cash for it. It all depends on what your needs are because saving money in the short term might end up costing you more in the future to repair or maintain an older car, and possibly not have the ability to purchase an upgrade shortly because of those past expenses. We should always consider the whole picture and always act in our best interest instead of out of convenience.
How to apply for a First Car Loans
You will usually need the following information: Social Security Number:
- Driver’s License or Government Issued ID#:
- Bank Accounts: (for direct deposit and/or electronic checks)
- Credit Card Information: (if you have any open lines of credit, this is where you can transfer balances from to pay off your auto loan.)
You may also want to research the company that you are applying to to avoid making a mistake. Most people do not give this much thought, but it can make all the difference in the world. Auto loan companies often change their requirements and criteria that they use to fund one consumer over another. This means that if you decide to only stick with one particular auto loan company, there is a big chance that they will reject your application at one point because of new requirements that they have established.
Requirements for First Car Loans
- Loan Amount: Within a certain range of loan amounts. Depends on your credit score.
- Term of Loan: A fixed period of time
- Security: Buyer deposits to the seller’s account, which holds the car and the money.
- Collateral: The car, less the deposit, and expenses for title transfer.
- The finance company pays for itself within 30 to 60 days after making your first five payments.
- We can help you avoid paying interest and providing a low-interest rate between 12 – 19% return on your down payment, sometimes less than 8%.