Tips for first-time car buyers to get auto loans online

What are first-time buyer auto loan programs?

Whether you’re buying your first new or used car or planning to apply for auto loans online for the first time, understanding how car dealers and lenders view you—and what you can do to improve that image—can help you be prepared. in before you apply for auto loans online for the first time, so you’ll be in a better position to get approved for an auto loan with a lower interest rate and better terms. After all, you want your monthly auto loan payment to be as low as possible, right?

Who Might Apply For First Time Buyer Auto Loans? Some people that first-time auto loan programs can help might include:

*Teens buying their first car in their own name will need to apply for first-time buyer auto loans, as they don’t have a credit history to back them up.

* College students living away from home for the first time often haven’t had time to build a credit history before heading off to college and will therefore often need to apply for first-time auto buyer loan programs .

* People who have always paid cash for a vehicle in the past, but now want to upgrade to a newer vehicle or are forced to apply for an auto loan because they do not have the cash funds to purchase a vehicle at this time.

* Immigrants who have moved here from other countries and therefore have left their credit history behind may need to apply for auto loan programs for the first time to start building credit history.

Not all first-time auto loan borrowers are in the same boat

The first thing to realize is that not all first-time borrowers are in the same boat. There can be many different factors that can work for or against you when applying for auto financing online. For example:

* Are you employed full or part time? If you are not employed, do you have income? Not being employed isn’t necessarily a bar to gambling, but if you plan to have your name on the car title and car financing, you’ll need to show that you have a job, regular income, or other funds you need. You will make your monthly auto loan payment. Of course, the higher your income, the easier it will be to qualify for first-time buyer auto loan programs with lower interest rates.

* Do you have no credit because you’re just starting your financial life, or have bad credit/low credit because you’ve had a few credit lapses in the past? Dealers will certainly work with you in any case. However, if you have a low credit score, depending on how bad your credit history is, the dealership may be inclined to offer you a higher interest rate and lower credit limit on homebuyer auto loans. first time compared to someone who hasn’t. made no credit mistakes in your financial life yet.

Please note, check out our recent article titled “How to Get Approved for a Bad Credit Auto Loan on Low Income” for information on how to remove unwanted items from your credit report to improve your credit score.

* Will you have funds available to make a down payment on your auto loan? Whether you’re applying for first-time buyer auto loans, or you’ve had auto loans in the past and just need another one now, what each car dealer or lender will consider when evaluating your application and the items on this list is; how much risk they are taking in giving you an auto loan and what they can get you to do to mitigate that risk. Making a down payment is one thing you can do to mitigate dealer risk, making it more likely that they’ll approve your auto loan quickly and give you a more reasonable interest rate. Also, a down payment will obviously reduce what you owe on the vehicle and therefore your monthly payments will be lower and more affordable. Down payments are usually not required to get auto loans online, but they can be very helpful when negotiating with a dealer. Even a small down payment can make a difference in how the dealer views you.

* Do you know someone who would be willing to sign on your behalf for your auto loan? No cosigners are required to get auto loans online, even if you have bad credit or no credit history. However, using a co-signer can save you a lot of money and make the application process much faster and smoother. A cosigner is someone who puts her name on their loan application along with yours, guaranteeing that the loan will be repaid. The limit and maximum amount of your auto loan will be determined by the co-signer’s income and creditworthiness, not yours. So if you choose to have a co-signer, be sure to choose one with a high credit score. With a cosigner, there’s really no need to shop around for auto loans the first time because the dealer will treat you as if the highest credit score and income were yours.

* What is the ratio of your monthly housing payment to your income? A little known fact is that car dealers and lenders pay attention to this number. For example, if you have an income of $1,000 per month and your monthly cost of housing is $300, then your cost of housing is 30% of your income. Anything over 40% will send a red flag to the dealer/lender and they may need to reassure you that you can make your monthly payments on time. Keep this in mind when completing your auto finance application.

By keeping the above items in mind, you should be able to get a clearer picture of how car dealers and auto loan lenders view you, and what you can do to control that image, at least to some degree. Once you’ve submitted your application, your lot has been cast and you’ll see what the dealer is currently offering.