Can I get a car loan from my bank?

I'm in the market for a new car, but I need to finance about $25,000. I know I can get a loan several different places, but I’m happy with my current bank. I’ve banked there since I was a kid and everyone knows me by name. Should I get a car loan from my current bank?

Answer
Since you feel like you’re in an episode of Cheers when you enter your bank, no wonder you want to continue to do business with them! If you meet their car loan approval qualifications, it shouldn’t be a problem.
To qualify for the loan, you will likely need:
  • Decent to great credit, depending on your bank’s specifications
  • Enough income to support the loan
  • A debt-to-income ratio lower than 43%
If you think you meet these requirements, apply for preapproval. The bank will ask for details about your income, debt, and credit and then—if all looks well—approve you for a certain dollar amount and interest rate based on your financial situation.
Once you receive preapproval, you can use the specified loan amount to find a car within your budget. You can even use it as a negotiating tool to get the car you want at a price you can afford (within reason, of course).
Preapproval also gives you an idea of what your monthly payments might be so you ensure you’re comfortable prior to signing on the dotted line. And if you get cold feet, preapproval comes with no obligations. Simply walk away if you decide you don’t want the loan.
But if you choose to move ahead, remember to consider insurance when budgeting for your new car expenses. Your bank will require full coverage auto insurance, which may be pricey.
That’s when the Jerry app can help. As a licensed broker, Jerry helps you find and compare quotes from over 50 top providers in just minutes. When you find a great rate, Jerry helps buy your new coverage and even cancels your old policy!
Eric Schad
Answered on Nov 10, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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