If you can’t afford to buy your car with cash, you’re not alone. Many people rely on financing to make car ownership possible and affordable. Still, you owe it to yourself to choose your auto loan carefully.
First, know that your credit score plays a major role in the rate you get, the higher your score, the lower your rate. To learn more about credit scores, check out our video about Understanding Your Credit Score. When it’s time to secure financing, you can do it two different ways, and there are advantages to each. The first way is the easiest – just ask for it at the dealership. For instance, if you want an auto loan with Veridian to ensure a low rate, easy online access and trustworthy terms, simply ask the dealer for Veridian financing. We can even help you determine a fair market value for your existing vehicle – just provide us with the vehicle’s VIN and any optional features.
The second way is to get pre-approved with a lender like Veridian. This can be a smart way to car shop because you’ll remove the chance for surprises when you’re on the car lot. With a pre-approval in hand, you’ll know if your credit score is good, what you can afford to spend and how much your monthly payment will be. If an auto loan application is denied because you have no credit score, a borrower may still get help from a co-signer.
A co-signer is someone with a satisfactory credit score who takes on responsibility for a loan. However, if you’re considering being a co-signer, you must know two things. One, the co-signer is just as responsible for paying off the loan as the primary borrower. Two, if the primary borrower misses payments, there will be a negative effect on the credit scores for both the primary borrower and the co-signer.