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How do I pay for a car with a loan?
I want to buy a car, but I don’t have the cash to pay for one outright. I’ve read that you can get a loan, yet I’m not sure how the process works. How do I pay for a car with a loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
If it’s your first time getting a
car loan
, don’t stress too much. Outside of a mortgage or a credit card, it’s one of the more common loans out there.If you can’t afford to purchase a car with cash, a car loan is a great alternative. A lender lets you borrow the money for the car with the caveat that you pay the car loan back in installments over a given period.
To pay for a car with a loan, you’ll first need to get approved. A lender takes several factors into account, including:
- Income
- Debt
- Credit score
More times than not, a decent to good credit score will get you approved for a car loan. However, you also need to show that you have sufficient income for the loan, as well as a low amount of debt to ensure a loan won’t cause you financial hardship.
Make sure to shop around to get the best car loan rates. Credit unions, banks, and online lenders can all give you a decent rate. The more effort you put in, the better your odds of getting a favorable car loan interest rate.
And if you finance a car, don’t forget that the lender will require full coverage auto insurance. This can get pricey if you don’t know where to look.
And that’s when
Jerry
can help. As a full-service car insurance broker, Jerry allows you to compare quotes from over 50 insurers so you always get the best rate for your required coverage.View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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