Having your own car is an excellent way to improve your overall quality of life. Since you no longer have to depend on public transport or taxi-hailing services, you can be more flexible with your chores and appointments. Besides performing routine tasks like going to the grocery or heading to work, owning your own private vehicle also gives you the chance to take much-needed road trips on your own or with friends.
Unfortunately, getting funding for a car is far from easy if you want to purchase a new model in the market. This is why it’s vital to appeal to lending entities to get an approved car loan. Although this process can get tricky, you can use this guide to help you get a better chance at favorable car loan terms.
How to Increase Your Chances of Getting an Approved Car Loan
Like any loan option, a car loan is offered by a lending company by measuring a borrower’s ability to pay. Sometimes, they may deny applicants due to the risk factors like their job status or inability to send the right documents. This is why getting turned down for a car loan is far from impossible.
Although it’s not as heavy a commitment as a home loan, a car loan is still a considerable investment you’ll have to pay off for a long time. For this reason, it’s important to take proactive steps to get the best loan available for your financial security.
In this article, we’ll share three ways you can increase your chances of getting an approved car loan.
1. Build Your Credit Score
A bad credit score is a common cause for lenders to turn down your application. If you don’t read their guidelines for credit score limits, you may need to double-check if you still qualify under their specific loan terms. For this reason, you need to build your credit score up before considering a car loan. Doing so will lessen your chances of getting denied with your next application.
Remember to commit to healthy habits like following your credit limits and paying your bills on time. The more consistent you are with your accounts and debts, the more likely your credit score will increase.
2. Balance Your Debt-to-Income Ratio
Lending companies look at your viability of paying for your current debts to your income. If you have a high debt-to-income ratio, you have a large debt that takes up most of your salary. The reverse means you have a lot of money to spare with your current financial obligations. For this reason, it will be beneficial to regulate your buying expenses to reduce your existing debts. The fewer obligations you have, the more likely a lending company will consider your application.
3. Negotiate Your Buying Options
If you’re still getting turned down with your loan applications, you may need to rethink the value of your purchase. Opting for a cheaper vehicle may be the only thing stopping you from getting accepted for your car loan application. Besides opting for a cheaper vehicle, you’ll also get to pay your dues much earlier.
Think You’re Ready to Apply for a Car Loan?
The suggestions above will surely increase your chances of getting approved for your car loan. However, it’s another matter to shop for the right loan providers. This task is best left to professionals who can give you the right advice. Thankfully, you can get expert advice by consulting with the right loan specialists for your loan of choice.
At Get Approved Canada, our loan specialists can give you the right advice for your loan-related needs. Discover the best financing options available to fit your financial situation. If you need quality car financing in Canada, contact us today!
