How do I apply for a used car loan?

I can't afford a new car, even with a car loan, but I think I can get a used car. What’s the best way to apply for a used car loan?

Answer
The process of applying for a used car loan is similar to getting any other loan. You will want to check your credit score, shop around for the best rates, and get preapproved for the loan.
Your credit score greatly affects the loan terms a lender will offer you. The better your score, the more negotiating power you will have to get a great deal. A score around 660 or higher is optimal.
But even if you have a lower score, don’t fret. Lenders will still work with people with bad credit or no credit. To make getting approved easier, consider:
  • Getting a cosigner
  • Putting more money down
  • Accepting a higher interest rate or longer loan term (but be careful with these and make sure you can afford it!)
There are more lenders now than ever before. You should shop around with:
  • Local banks
  • National banks
  • Credit unions
  • Online lenders
  • Dealerships
Once you’ve talked to various lenders, getting preapproved can help you secure a used car. Preapproval lets you know exactly how much you can afford and will help you negotiate with the seller.
Note that car loans are not set in stone. If the time comes that you need or want to make changes to your loan, you can refinance. Refinance quickly by downloading the Jerry app. On average, car owners pay $85 less every month by refinancing.
Lauren Smith
Answered on Nov 17, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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