Get Approved for a Car Loan the First Time, Every Time – 5 Easy Steps
- 08 January 2014
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Car loans are items that every UK resident needs at some point in life. After all, no one can get to work without a vehicle to take him or her there. Receiving approval for a car loan is something that takes strategy and planning. One cannot just request a loan without guidance for doing it the right way. The following provides a five-step strategy a British consumer can use to receive approval for a car loan the first time, every time.
Check and Improve the Credit Score
The first step in ensuring that one receives an approval for a car loan in the UK is for that person to check his or her credit score. Knowing where one stands in the credit world will give that person an idea of the types of lenders that he or she should visit. Those with excellent credit scores will most likely gain an approval no matter where they go. Alternatively, people with fair, poor or no credit will need to research companies that are forgiving and generous toward such consumers.
Save a Deposit
Once a person checks his or her credit score and does everything possible to improve it, the next step is gathering a down payment. Even consumers with excellent credit need to save a substantial down payment. Large down payments help to put consumers in better interest brackets. Such down payments will work to decrease the monthly payment the consumer has to pay as well. An effective down payment for a car is one that is at least £1,000, but a lender will welcome a down payment of £3,000 as well.
Calculate Disposable Income
Before a person can apply for a car loan, he or she should know the type of loan that is affordable. To calculate disposable income, the consumer should subtract monthly income from monthly household bills. The figure the person gets at the end is the amount that he or she has to spare for a car payment. Knowing this information, the debtor can then use a payment calculator and select a vehicle with payments within that range.
Get Documentation in Order
A person who is going to go to a physical location to apply for a car loan will need to bring a significant amount of documentation. Identification is the most important item the lender will request. Driving licenses and national identity cards are usually sufficient.
Next, the person will need to have proof of income and address. Proof of address may be a utility bill, bank statement, credit card statement, council tax bill and more. Proof of income consists of pay stubs or verified earnings statements from employers. The applicant must also have the ability to register and insure a vehicle.
Once the paperwork, funds and car choices are correct, the consumer can talk to practically any lender to process an application. Using the aforementioned strategy should guarantee an approval.