A Millenial’s Guide to Getting a Car Loan for the First Time

Young people who have never purchased a car before should make a special point of learning a few things. This is one of the biggest purchases that you will ever make in your life, so you will therefore need to make sure that you don’t rush through it at all. When you know which steps to take, you will be able to get a car loan that you will actually be able to pay off on time without any problems.

Look at Your Own Finances

The very first thing that needs to be done when it comes to getting a car loan is to look at your finances so you know exactly what you can afford. The last thing you want is to take out a loan and not be able to pay it back, so it is crucial that you do this before anything else. You will need to determine how much you can afford to pay each month, and it’s important to factor in interest. The interest rate you pay will depend on the lender you choose as well as numerous other things.

Run a Credit Check on Yourself

Anyone who is planning on applying for a car loan should know what their own credit is like. When you learn what your credit score is, you will have a more realistic idea as to what kind of deal you can get on these loans. If you find that your score is very low, you might want to take some time to improve it before applying. Once you have boosted your credit score, you will be able to get a much lower interest rate.

The less interest you have to pay on your loan, the easier of a time you will have when it comes to handling payments. While it’s true that a person’s credit isn’t everything when trying to get a car loan, it is still an important factor that shouldn’t be overlooked.

Search for a Good Lender

You don’t want to choose just any lender, because there are a lot of them out there. While many young people go to banks to get car loans, this is sometimes a big mistake. If your credit isn’t very good or not well-established, you should think about going with a private lender. You will quickly learn that private lenders tend to accept a lot more applicants who have low credit scores.

There are a few key things that make for a good lender, including an impeccable reputation without any complaints against them. Make sure that you spend a decent amount of time reading reviews for private lenders online so that you can decide on one in particular that can provide you with an amazing deal.

If you know someone who has borrowed money from a private lender before, making sure that you get the lender’s information from them. Sometimes a referral is the best way to go about finding the right lender when you aren’t sure who to choose.

Use the Internet to Your Advantage when Applying

Applying for a car loan online is certainly a good idea, simply because it is the most convenient and expedient way to get the money you need to buy a car. Applying for this sort of loan online only takes a matter of minutes, and you will be glad you set aside the time to do it. You can apply for the loan right on the lender’s website, so it is all very convenient.

Make certain that you submit accurate information on your can loan application online, because otherwise you will have a lot of trouble getting approved. Once you have submitted your application, it won’t be long before you hear back from the lender. They will tell you whether or not your application has been approved.

Receiving Your Money

If you get approved for a car loan by a private lender, you will end up receiving the money electronically, as it will go right into your checking account. This means that you won’t have to deal with waiting for a cheque to come in the mail. This entire process is known for being incredibly fast, which is a great thing for those who need a car right away. Keep in mind that you will need to sign a contract with the lender before you can receive your money. This contract will state all of the terms of the loan, and it’s crucial that you review it closely prior to signing.

Paying Back the Loan

You will be required to pay back your car loan in monthly payments. Each of these payments will have a certain amount of interest attached. Some people pay more interest than others, and it largely has to do with the lender you are borrowing from as well as your credit score. If you are having difficulty paying back the loan because your minimum required payments are just too high, you might want to think about refinancing.

Lots of people in the UK refinance their loans each year because it is such an effective way to get a lower interest rate. This is a much better way to go than defaulting on your loan. Those who do not pay their loans back get a big negative mark on their credit reports, and their scores go down a lot.

Only get a Car Loan When You Are Ready

You should only apply for a car loan if you feel like you are ready for this responsibility. Not everyone should get one of these loans, so you will need to keep that in mind. Sometimes it is a good idea to hold off and revisit the idea later on down the road, but the decision is ultimately yours. The more time you take to get information on these loans, the easier it will be to get one without any problems. You will be glad you researched the process of getting a car loan when you need one.

Getting a Guarantor Loan if You Have Bad Credit

If you have made some mistakes with your finances but need to get a loan, there are still options available that you will need to look into before calling it quits. A guarantor loan is a popular and convenient way to get the money you need without having to worry about your credit being a problem. A lot of lenders who give out these loans will approve applicants that don’t have great credit, so it’s an option you will need to learn more about before moving on.

Choosing a Guarantor

The guarantor is essentially the person who will sign onto your loan accepting responsibility for paying off the loan in full if you are not able to due to illness, unemployment or other unforeseen circumstances. This person must have a solid credit rating, stable employment and adequate income. Keep in mind that the lender is going to take a long hard look at the person you want to be your guarantor, so it’s important to find someone with the necessary qualifications. You must also completely trust this person, as they could end up needing to take over the loan payments for you at some point.

Cute Any Financial Ties with the Guarantor

The lender will not care if you are related to the guarantor in any way, but you shouldn’t have any financial ties with this person. This means that you shouldn’t share a joint bank account or anything else that could be a problem when applying. Eliminating these conflicts will increase your chances of getting approved by quite a bit.

Establish an Agreement

You should reach a clear and concise agreement with your guarantor which states that they will pay off the remainder of your loan if you cannot. It is important that this person is completely clear on all of their responsibilities so there is no confusion. You will also want to have the guarantor read the loan contract in full before they sign, and you should do the same. The contract that you enter into with the lender is going to be legally binding, so you will have to take it seriously. Go through the document with a fine tooth comb and read every single detail until both you and the guarantor are satisfied with the terms of the loan.

Search for a Lender You Can Trust

Many lenders give out guarantor loans, but that doesn’t mean you should choose the first one you come across. You will need to make a point of looking for a lender that will give you a good deal in terms of your interest rate. Set aside some time to do this research so you don’t end up getting ripped off. The internet is by far the best resource for doing this research, so you will need to spend some time using it to your advantage.

Take the time to find out which credentials each lender has and if they have any negative reviews from previous customers. You can learn a lot about a lender by looking at websites that have these reviews, so you will need to spend some time doing that. Look for a lender such as Emu.co.uk that is also flexible and will be willing to work with you if you start struggling to make your monthly payments. While it’s true that your guarantor can take over the loan payments, you will want to avoid this situation if possible.

Decide How Much to Borrow

You will need to sit down and figure out exactly how much money you need to borrow, because you won’t want to take out any more than this. One of the biggest mistakes that a person can make when getting a loan is to take out more than they can afford to pay back, and as a result they usually default. If you want to keep your credit intact and improve it, you must pay your loan back on time. Look at the state of your finances so you will know exactly what you can afford to pay every month before moving on in this process.

Benefits of Guarantor Loans

There are many different reasons to get a guarantor loan, including:

• Credit isn’t a problem: The lender won’t care very much what your credit score is like, but the guarantor’s will matter. Lots of people in the UK end up turning to these loans for financial assistance because their credit score is so low.
• Fast access to funds: You can generally get the money you need very quickly with a guarantor loan if you are approved. It won’t take more than one or two business days to get the funds you need.
• Apply online: It is possible to apply online for a guarantor loan, so you won’t even need to leave your home. The application process is very quick online when compared to filling out actual paper loans at a bank. It is also very simple and straightforward, so you will know exactly what to do step by step.
• Reputable lenders: There are plenty of reputable lenders who give out guarantor loans, but you will still need to do your research. It is a common myth that all private lenders are shady scam artists. In fact, a lot of these lenders are actually quite friendly and flexible with qualifying individuals.

Who Should get a Guarantor Loan?

Guarantor loans are well-suited to many different people, especially those with bad credit. If your credit score is extremely low and you’ve been turned down for loans by banks before, this could be a great option to look into. Only responsible people should get one of these loans, as it needs to be paid back on time. Take all the time you need to find the right person to act as your guarantor so you can be sure that they will come through for you if the need ever arises. These loans can be very helpful to a lot of people, and you’ll be glad you decided to apply for one.