How to Get a Car Loan from a Bank

Get Car Financing
Even with poor credit.

By

Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - June 22, 2018

Traditionally, banks only offer loans to consumers with the best credit. But, their loans typically feature the best rates, so it pays off in the long run if you can get pre-approval for a car loan from a bank.

Before You Visit the Bank for an Auto Loan, Be Prepared

Because it’s generally more difficult to get approved for an auto loan from a bank, you’ll want to be as prepared as possible. Anytime you’re dealing with lenders, the best way to get prepared is to know what your credit looks like. This means requesting your credit reports and viewing at least one credit score.

In the US, you can get a free copy of your credit report every 12 months from each of the three national credit bureaus – TransUnion, Experian, and Equifax. You can also get your credit scores from them, but the bureaus typically charge a small fee.

Now that you’ve discovered where your credit stands, it’s time to make sure that your budget can handle both a car loan and an insurance payment. Luckily, budgeting for a car loan is easy to do, especially when you use the online tools we have available. Remember, budgeting for a car means more than just the out-the-door price at the dealership. Things like maintenance, fuel, tax, title, and license fees, and auto insurance need to fit into your budget, as well.

When budgeting, there are two figures you should be looking at: your debt to income (DTI) and payment to income (PTI) ratios. These are calculations lenders use to determine if you earn enough to support car and insurance payments. Lenders want your DTI (before tax income divided by your bills) to be less than 50 percent, and your PTI (before tax income divided by your car payment) to be less than 15 to 20 percent.

One last thing to do before visiting a bank is to make sure you have a down payment – the larger, the better. Putting down at least 20 percent of the vehicle’s selling price will help you get approved and out of negative equity more quickly than a smaller down payment. If you’re dealing with poorer credit, lenders typically require you to put down $1,000 or 10 percent of the vehicle’s selling price.

Finding a Bank to Do Business With

When it comes to direct auto financing, you should start with a bank you have a strong history with, although you should do some research online to make sure it offers the loan options you need before you make an appointment to sit down with a loan officer.

If your bank doesn’t offer what you need, you may want to explore other banks in your area. You can also search online for banks that give loans you may qualify for, or for online lenders. At the same time, if you’re facing credit challenges, the chances are slim that a bank will approve you for financing. If that’s the case, turning to CarsDirect can help.

Get the Auto Financing You Need, Without a Bank

We work with a large network of special finance dealers from coast to coast with the subprime lenders available that work with people whose credit holds them back from getting a direct bank loan. The lenders at these dealers specialize in helping people with low credit, no credit, bankruptcy, and even repossession. Take charge of your auto financing situation today by filling out our simple online auto loan request form now!

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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