Finance FAQ
Financing an auto loan can be a confusing process; luckily, we’re here to help. By reading below, you can learn more about some of the most commonly asked questions in auto financing. Whether you want to know more about how to get approved or you simply want to manage an existing loan, there are some important things every car buyer should know.
How Do I Get Approved For A Loan?
The main factors that contribute to your ability to get a loan including your credit rating, your down payment, collateral or a co-signer, and your relationship with the lender. The credit rating is one of the most important components, because it essentially tells lenders about your creditworthiness (i.e. how likely you are to pay back a loan).
How Are Interest Rates Calculated?
The interest rates for your loan may be determined by your credit history, the loan amount financed, the loan to value (or LTV) on the vehicle, and your relationship with the lender. Market trends can also have impact on your interest rates.
Do I Need Car Insurance To Get A Loan?
Many major lenders may require that your vehicle is covered under an active comprehensive and collision auto insurance policy that names the lender as the “loss payee.” This provision ensures that they’ll recoup their costs in the event that the car is totaled.
Can I Trade-In My Car Even If I Haven’t Paid Off The Loan?
Yes, most lenders will let you trade-in a vehicle even if you have not paid off the loan; however, they may keep the vehicle title until the loan is paid in full.
Do I Need To Have A Co-Signer?
A co-signer or co-applicant is not required, but for first-time buyers or those who might have poor credit, a co-signer is encouraged to improve the likelihood auto loan approval.
If you have any other questions about starting the Finance process, contact us at Bob Thomas Ford.