A Beginner’s Guide to Financing a Vehicle
With interest rates starting to drop, now is an excellent time to explore your options for financing a vehicle. Whether you’re considering buying your first car or upgrading your current one, understanding the basics of car loans can make the process smoother. Our team is here to guide you through each step, whether you choose to finance with us or your own bank.
Will I Qualify for a Loan?
One of the most common questions we hear from first-time car buyers is, “Will I qualify for a loan?” The answer depends on a few factors. All in all, you won’t know until you apply.
Depending on your situation, qualifying for a loan might involve having a co-signer, proving you have steady income, or saving for a down payment. Everyone’s financial situation is unique.
At MATS, we strive to make the process as simple and stress-free as possible. Our straightforward application and knowledgeable car-buying experts are here to help you navigate the requirements.
Understanding Credit Scores
A good credit score can increase your chances of loan approval and secure a better interest rate. Generally, a score of 690 or higher is considered favorable for auto loans. If your credit score is lower, consider applying with a co-signer who has a stronger credit profile, such as a parent, spouse, or trusted friend.
What Will My Monthly Payment Be?
Another important consideration when financing a vehicle is determining a manageable monthly payment. Your payment will be influenced by several factors:
- Interest Rate: The rate you’re approved for will depend on the year of the vehicle, not its make, model, or mileage. Newer cars typically come with lower interest rates.
- Loan Term: This refers to the duration of your loan. Standard loan terms are usually 24, 48, or 60 months, but you can extend to 72 months or more to lower your monthly payment. Keep in mind that a longer term can result in paying more interest over time.
- Down Payment: The more money you put down initially, the lower your monthly payments will be as you’ll be borrowing less money. It’s a good idea to save up for a down payment to reduce the overall cost of the loan.
Don’t forget to factor in state sales taxes and full-coverage insurance, which most lenders require as a condition of the loan.
Ready to Get Started?
If you’re ready to buy a vehicle but feel uncertain about financing, don’t worry! The MATS team is here to support you every step of the way. We’ll work with you to find the best financing options that fit your budget and needs. Whether you’re a first-time buyer or looking for your next vehicle, we’re excited to help you get behind the wheel of the best car for you.
For more information or to start your financing journey, contact us today!