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Beginners Guide to Personal Car Loans

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By Edited Feb 2, 2014 0 0

If you wish to buy a car, you may want to first find personal car loans. There are many loan options available. Therefore, you should investigate each option before you make a concrete choice.

gift car on a car loan

About Personal Car Loans

Car loans are like other loans in that you will get money to be able to pay for your car. The company will then expect you to repay the loan amount in full with interest over a given period. Obviously, you can be certain that lenders will prefer if you can prove that you are responsible with money.

Car Finance Options Available

You will probably have to consider getting a personal or a car loan. These are similar although car loans will use your vehicle as the security for the loan. Also, the interest rate charged annually is lower than with personal loans. However, for the vehicle to be eligible for use as security, it should meet certain conditions. For instance, it should be below a given age and above a given amount (value).


  1. The monthly payment should not exceed 20 percent of your income
  2. You should be able to prove employment by the same firm for at least 6 months
  3. Proof of an income that is over a minimum amount per month with computer generated proofing paychecks
  4. Proof of having lived in the same place for the past 6 months or more
  5. Phone numbers, address and name of at least 7 family members or friends as references
  6. Minimum of 1 year of on time excellent credit history
  7. No blemishes in the past half year on your general credit history

Tips for Buyers

That said and done, you can do a number of things to make it easier for you to get the a loan. Use the following helpful tips to raise your chances of getting a loan you have been waiting for.

a) Use a Co-Signer

Before you embark on the loan comparison, get a family member (such as a parent or guardian) to co-sign your loan. This works well for young people who have no credit history. The terms will factor in your co-signers' credit history, income and assets thus giving you a better chance.

b) Repair Your Credit

Financiers are more likely to give you a larger loan and better terms when you have excellentcredit. If your credit history is poor, therefore, ensure you repair it. Pay off any unpaid balance and settle your old bills.

c) Make a Down Payment

Save some cash and use it as your down payment. This proves that you are serious about getting that car. It will also reduce the amount you will borrow. Some banks actually require a down payment of about 20 percent or more.

d) Borrow Online

There are many lenders willing to help you get your vehicle today. You just need to go online and revisit the offers made by these lenders. Where possible, use a comparison to choose the best among the best deals.

Finally, purchasing a car is not as easy as it seems. Learn and research and ensure you are serious in your applications.



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