How do you take out a loan for a car?

How do I get a car loan? I want to take out a loan to buy a Lexus RX, but I don’t know how.

Answer
Getting a car loan for the first time can seem overwhelming, but it’s fairly easy once you know the steps. To get a loan for a car, you will first need several documents:
  • Government ID: You can use your driver’s license or other government-issued identification.
  • Proof of employment: You’ll need to bring pay stubs with you to prove you have the income to pay for your loan.
  • Information about the car: The lender will want the year, make, model, VIN, and proof of insurance.
Once you’ve gathered the necessary documents, check your credit. Your credit score determines your interest rate and the amount you can borrow, so you’ll want to be sure it’s accurate. Check with the three major credit bureaus or use a service to confirm there are no errors.
From there, you can apply with different lenders like:
  • Banks
  • Credit unions
  • Dealerships
After you’ve found a lender you like, be sure to review the loan agreement before you sign. Once you sign the loan, there’s no going back, so ask any questions you may have now.
After you’ve signed the agreement, you’ve officially gotten a car loan!
Before you drive off the lot with your new Lexus, the dealership and your lender will require car insurance.
If you want to save money on a policy, use the Jerry app. A licensed broker, Jerry gathers personalized quotes from the top name-brand insurance companies. The average Jerry user saves $879 a year!
Phoebe Mah
Answered on Nov 24, 2021
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