How do I get a loan for a car?

I just graduated from grad school and landed my first real job. To celebrate, I want to purchase a car, but I need a car loan. I’ve never had a car loan before. How do I get a loan for a vehicle?

Answer
Congratulations on graduation and your new job! As a full-fledged adult, getting a car loan is the next natural step! If you want to get a car loan, check your credit report, shop around, get preapproval, and finally, apply for the loan. Sounds easy, right? If you’re feeling flustered, here are some more in-depth instructions.
Start by looking at your credit report. Note your credit score, which is a huge determinant of your car loan interest rate. You should also pay off any delinquencies and debt to increase your credit score and lower your debt-to-income ratio, which lenders use to gauge your creditworthiness.
Next, shop around for your car loan. Some great places to look for excellent interest rates include:
  • Dealerships
  • Credit unions
  • Banks
  • Online lenders
Once you find a handful of lenders you prefer, apply for preapproval. Preapproval is not legally binding, but it gives you an estimated interest rate, budget or total loan approval amount, and monthly payments. With this information, you can narrow your search for a car and use the approval amount in the negotiation process.
Finally, apply for the loan with your preferred lender. You will need a handful of documents to apply, including:
  • VIN or other vehicle information
  • Proof of insurance
  • Proof of residency
  • Proof of income
  • Potential car insurance information
Since every lender requires full coverage car insurance for a financed vehicle, make sure to shop around for the best rate possible. Download the Jerry app today to find the most savings that you can put back into your investment or pay down the loan more quickly.
As a licensed broker, Jerry helps you find and compare quotes from over 50 top providers in minutes. When you find a superb rate, Jerry can help you buy the policy or transfer a policy to your new vehicle. The average Jerry customer saves almost $900 per year!
Eric Schad
Answered on Dec 14, 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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