4 Things Your Car Loan Lenders check before approving your loan
If you are planning to buy a new car and don’t have the enough amount to buy it, loan is the only option for you. Car loan lenders will help you to get your dream car by giving you a loan. Applying for the new car is the easiest process but your lender will check many things to verify your creditworthiness. Let us see few things that your car lenders check:
1. Your Income
Before giving several thousand rupees as car loan to you, lenders will check your income to know whether you will be able to pay them back or not. If you don’t have any source of income or any good job. They will show less interest to give you the loan. They will compare your income and your total debt. If these things do not match their rules, then they will not give you the loan. They might help you by offering other riskier type of loans, which will have higher interest rates. To avoid high interest rates, before going to apply for car loan make sure that you can show some sort of income to them. So, that you can get your loan easily with less interest rate.
2. Your Credit History
Lenders will be more interested to check your credit history and the length of time that you have been using your credit. No lender wants to be the first to give you the loan as they don’t want to take the risk. Thus, it will be easy for the lenders to take the decision if you are using your credit since longer period of time.
3. Your Credit Score
Credit score is the biggest thing that your lenders check. It is a numerical expression depends on person's credit files, to show the creditworthiness of an individual. Car loan Lenders check credit scores to know who qualifies for a loan, at what credit limits and what interest rate. If you have good credit score, then lenders will be happy to give you loan and if you have bad credit score, you might face some problems getting a loan. Therefore, credit score gives the car loan lender an easy way to quickly get an impression of you as a borrower.
4. Public Records
There is a section on your credit report for any public record information. This section will show the lender whether or not you have debts, tax liens, lawsuit judgments or bankruptcies against you. If you have any bankruptcy in your past, it may be tough to get a good amount of loan on a car. They feel risk to give you loan. So, try to keep good public records.
Above are the things your lender might check before providing car loan to you. So, before going to apply for car loan- keep good income, make sure you pay all your previous credit loans on time, don’t apply for loan with many lenders, don’t do more credit enquiries, maintain good credit score, keep your public records clean.