How to Get Approved for A Car Loan

Buying a Car is an exciting experience. For many, the only way to buy a car is by having access to Car Loan.

The biggest mistake you can make as a car buyer is not get pre-approved for a car loan. If you don’t get pre-approved, how would you know how much you can borrow? How would you know if you can get a loan in the first place? How would you know what cars are within your price range? You wouldn’t…

In saying that, getting access to a Car loan isn’t easy. You should never just assume you are going to be approved. There are a few things you need to do to increase your chances of receiving a car loan approval.

Here’s How to Get Approved for A Car Loan in Australia.

1. Find out your Credit Score

The first thing that a lender will look at when it comes to deeming if you are eligible for a car loan or not is your Credit Score. A Credit Score is a number ranking that indicates your individual lendability based on your current credit standing. A Lender will look at your credit score to determine whether you are suited for a loan or not.

The first way that you can increase your chance of receiving approval for a Car Loan is by finding out your credit score. Finding out your credit score will give you an idea of your current financial situation and how a lender will see you. The benefit of gaining your credit score is it gives you the ability to see what areas you may need to improve to increase your chances of approval. If there are a few things you need to work on, you can do so before you apply for a loan.

2. Limit Your Expenses

This one may be tough, but ultimately your expenses play a huge role in determining whether you can access a car loan or not. If a lender sees that you already have large expenses, whether it be current loans, high living expenses or high spending, they will be reluctant to lend you more.

To increase your chances of receiving approval for a Car loan you need to limit your current expenses as much as possible. Try to get rid of any outstanding debt you may have. We know that this may be tough, but it will go a long way to receiving approval.

3. Build Your Savings

Another small thing that can make a massive difference when it comes to receiving car finance approval is building your savings. Building your savings show lenders that you can prioritize your spending. As such, you will be seen as less of a risk than those who have little to nothing in their savings account.

We are not saying you need to save thousands every month but try to build your savings over a period of time. Something as small as an extra $20 - $50 a week being added into a savings account can make a huge difference. Plus, the more you have in savings, the less you borrow – it’s a win, win!

4. Get Rid of Your Credit Card

Believe it or not even having a credit card is a huge factor when it comes to approving someone for a loan. Even if you don’t use the credit card, a lender sees it as an avenue where you can quickly access more money at the drop of a hat– the problem with that is it is an additional liability on your behalf.

It has been found that getting rid of your credit card entirely will significantly increase your chances of receiving approval for a car loan.

5. Shop around

A massive mistake that so many car buyers make when it comes to accessing finance is only applying for finance through the one lender. If that lender says no, what happens? You should never put all your eggs into one basket!

One of the best things about the current market is there is an abundance of different lenders available to you. What one lender looks for may be different to the next, so it is important that you take advantage of it. To increase your chances of receiving car finance approval you need to shop around and see what lenders have to offer. If one provider says no, another may say yes, it’s all about seeing what is out there in the market.

Related Article: Bank Said No to Your Car Loan? Here’s What You Can Do.

How can Shop for Cars help?

Shop for Cars gives buyers access to over 60 automotive lenders in one easy to use dashboard. By clicking on a car that you are interested in on Shop for Cars, you can apply for finance in a simple easy to use finance widget.

After submitting a short 5-minute application you will be presented with different car loan options from over 60 leading lenders. The benefit of this is you can choose what option works best for you, without having to manually shop around.

Shop for Cars will save you time, money and get your hands on your dream vehicle faster.

To learn more about finance in Shop for Cars click here or begin your search for a vehicle today here.

About Shop for Cars,

Shop for Cars is Australia’s first car dealership-only online classified. Shop for Cars brings you the best quality new and used vehicles from trusted motor dealers Australia wide. Shop for Cars currently has over 12,500 cars listed for sale all from licensed Motor Vehicle Dealers ONLY.

Click here to begin your search.

DISCLAIMER: This is all based on opinion please research and consult with all relevant parties to make the best lending decision.