best personal loans

Do you have a credit history?

Many first time car buyers who need financing, believe it or not, fail to consider that the willingness of a lender to help you own a car is based on your credit rating. Most first time car buyers are young and have a non-existent or very scant credit history. You need to establish your credit. Getting a gas card or a department store card is relatively easy. When you use these cards, pay them off monthly. Never get closer to your spending limit than 50%. If you do this successfully for six months, you will have something substantial enough to convince many lenders that you are an acceptable risk.

Can you get a cosigner?

If you have no credit history and do not feel you have the time to build one, you may want to consider getting a cosigner. This can be a parent, a relative, or even a friend, but they must have a good credit history. If you default on the loan, it becomes the responsibility of the cosigner. This puts your cosigner at some risk. The cosigner should be fully aware of the liability. Do not betray the trust by defaulting. Successful repayment will get your credit history off to a good start.

You need to make some preliminary deliberations.

First of all, there is nothing wrong with buying a used car. The minute you drive a new car off the lot its value plunges precipitously. Buying a used Toyota Camry or a Honda Accord is actually a recommendation made by many consumer organizations. But, do not expect to get financing for a car more than five years old.

Optimally, you should have saved enough to put down 20% of the vehicle purchase price, new or used. This shows lenders you are earnest about paying off the loan. Make a budget so you know exactly how much you can afford for monthly payments. Do not forget to include other costs: Insurance. Gas. Maintenance. Tags. Titles. Taxes. If you are buying a used car from a dealer, make sure there is a guarantee or warranty to protect you from unreasonable failures.