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Where to apply for a car loan


How to get a car loan?

Should you use a broker or your own bank? It is important to note that each lending institution has its own guidelines when approving a car loan to a customer. According to various terms and conditions a car loan application may be approved or rejected.

The lenders will look at your credit history, your current earnings, your financial stability, your existing loans and other factors when processing your car loan application. Various lenders have different guidelines and levels of flexibility when assessing your loan application. The same car loan application can be rejected by one lender and approved by another lender.


Applying for a car loan with a broker


A good broker will know exactly which lender to use for your particular car loan application, as the broker is familiar with all lender guidelines. The broker will select a lender which has the most suitable criteria for approval of your car loan application. The broker should try to match the lowest interest rate applicable to your financial credit rating.

This means if your credit rating is perfect, the broker will be able to organise a car loan with a lower interest rate. On the other hand, if you have defaults the interest rate for your loan will be higher. The more risk your car loan application has, the higher the interest rate for the car loan will be.
Advantages of applying for a car loan with a broker


- The broker will look for the lowest interest rate applicable to you
- Better chance for approval of your application
- Your time is saved as the broker shops around on your behalf
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Applying for a car loan with your bank


If you have a good credit rating and a sufficient income, applying for a car loan through your own bank may be a good idea. In this circumstance your bank will most likely approve your car loan. The only question here is... does your bank offer the best interest rates for your loan?

Can you obtain lower interest rates and repayments with a different bank / lender? Your own bank will not tell you if their competitor has lower interest rates, so it is a good idea to shop around. When you are applying for a car loan and your application is rejected it will be recorded on your credit file. This mark on your credit file will have a negative impact when you try to apply for a loan again.

Advantages of applying for a car loan with your bank:


- Existing business relationship with your banker
- A good credit history with your bank will help you obtain the car loan
- Dealing locally




 

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