How do I get a car loan?

I want to get a new car and I’ve always read that the Toyota Camry is one of the most reliable cars you can buy. I’ve never had a car loan, but I need one to purchase the Camry. How do I get a car loan?

Answer
The Toyota Camry is consistently rated among the top cars in America by numerous publications, so you made the right decision. While getting a car loan may seem daunting, it’s a straightforward process that involves your income, debt, and credit score.
Before you begin to apply for loans, start by shopping around and comparing rates. The best places to look include:
  • Credit unions
  • Banks
  • Third-party lenders
  • Dealerships
Once you’ve narrowed down a few options, apply for pre-approval. Car loan pre-approval entails a lender reviewing your income, debt, and credit score to estimate the interest rate and how much they’re willing to let you borrow.
When you get pre-approved, you have a concrete amount of money you can spend, which enables you to budget. You don’t have to spend every last dime of your pre-approval amount. Moreover, you can use the pre-approval amount as a bargaining tool to get a better price on your vehicle.
Keep in mind that car loan pre-approval is not a legally binding document. If you can’t find the Camry you want or you have any other issues, you can back out at any time.
If you have poor credit, finding a lender to approve you may take longer than those with good credit. But don’t despair. Keep looking and you should find someone willing to work with you. Be aware that some lenders will charge outrageous interest rates for people with poor credit. Don’t sign the contract unless you feel confident.
Once you find the car you want, simply return to your lender, give them the vehicle information, and sign the actual car loan.
During the car-buying process, think about shopping around for car insurance simultaneously. Lenders require full coverage car insurance, which can get pricey, but it doesn’t have to break the bank. Use the Jerry app to compare personalized quotes from the top 50 providers, including Nationwide, Allstate, and Travelers, in minutes for free. The average Jerry driver saves $879 a year on car insurance!
Eric Schad
Answered on Nov 09, 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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