Applying for a car loan is relatively simple. There are numerous lenders who offer quick quotations, and most applications can be made online or by telephone in just a few minutes. You can also visit a branch of a bank, building society or lender, which may be preferable if you wish to discuss your requirements in detail. Bear in mind that banking advisers aim to sell you their own car loans and are therefore unlikely to offer you objective advice. Take time to compare deals offered by different lenders. If you need the loan urgently, you should still shop around: most applications can be approved or declined within twenty-four hours.
Many lenders will offer 'no obligation' loan quotations. These can be useful as they allow you to compare a range of deals from different lenders. However, you should remember that each quote you obtain requires a credit check, which is recorded in your credit report. Your credit report is a document that records your history of debt management. If a number of credit checks are carried out within a short period of time, you may find obtaining credit in the future more difficult, for example if you apply for a mortgage or a mobile phone contract.
When you fill in a car loan application, most lenders use an automated checking system, which can result in the refusal of your application on seemingly negligible grounds, such as incorrect electoral roll registration and inaccurate personal details. Ensure that you fully complete an application form, reading each section of the document carefully before sending it to the lender. If you feel a particular section is not relevant in your case, you are advised to write 'N/A' (not applicable), so that the lender is aware that you have deliberately left the section blank. Check that your application is completely accurate. Including any information which cannot be backed up with evidence, or which you have not checked for accuracy can affect your application.
Your financial circumstances will determine the highest loan that you will be able to pay back. Therefore, the loan amount is one of the biggest factors that influences the lender's decision. Ensure that you request a loan amount that covers what you need to borrow, but is also a true reflection of what you could reasonably repay. A lender will decide whether or not they are prepared to offer you this amount; in some cases they may offer you a lower amount, a higher interest rate, or decline your application altogether. Advisers suggest that you should obtain a copy of your credit report before you apply for a car loan. This will give you a better idea of your current financial status and enable you to ensure a successful application.
For further details on unsuccessful applications, see:
