How to Get a Car Loan

How to Get a Car Loan

Searching for a new car near Amherst, Manchester, and Derry is exciting, and buying one can be quite easy, too. While most people need to take out an auto loan, getting a great one is simpler than you might think. All you need to do is follow the step-by-step guide provided by Ira Toyota of Manchester.

Keep reading to learn how to get a car loan, and contact us if you have any questions.

1. Check Your Credit

Credit Score

The first step to getting an auto loan is to check your credit score. This three-digit number comes from information found in a credit report, and it plays a key role in the rate that you’ll pay for a loan.

Your credit report will come from three major reporting bureaus: Equifax®, Experian®, and TransUnion®. Within this report, you’ll find information on:

  • Current and past credit accounts
  • Accounts that are past due
  • Companies that have pulled a copy of your credit report (known as “inquiries”)

If your credit score is on the lower side, you can always raise it to get a lower interest rate. Pay off your credit card balances and smaller loans, and make sure all your bills are paid on time.

2. Create a Budget

The next step is to create a budget to see how much you can afford to spend each month on an automobile.

Create a list of two columns, with the left being your income each month and the right being what you spend on bills, groceries, etc. Subtract the right column from the left to get your surplus. A surplus is what you theoretically could spend on a vehicle. However, you’ll need extra money for gas, insurance, and maintenance. Keep the other expenses in mind when you write up your budget.

It’s recommended to not spend more than 10% of your take-home income on a car. So, you may want to consider having a lower monthly payment. Use an auto loan calculator to see what kind of loan you can afford based on your ideal monthly payments, loan period, and interest rate.

3. Get Pre-Approved


Before you pick out your next new ride, you’ll want to get pre-approved for a car loan. However, keep in mind that pre-approval for a loan only lasts for a short time. Therefore, you’ll want to complete this process when you’re just about ready to shop for a new vehicle.

When you get pre-approved, the lender will determine how much you’re eligible for. They’ll also tell you what interest rate you qualify for before you arrive at the dealership. By doing so, once you’ve picked out your new car and are ready to buy, the process will be pleasant and streamlined.

4. Choose Your Next Car

The final (and most fun) step is to go shopping! Visit your local dealership to see which models they offer in their showroom. Decide if you want to buy new or used, and then have a salesperson point out which cars have the features that are on your must-have wish list.

Test drive a few vehicles to narrow down your options. If you’re torn between two cars, test drive them again to help make the ultimate decision.

Once you’ve done that, you’ll want to visit the dealership’s finance center to meet with one of their expert staff members. They’ll go over your pre-approval form and budget. Then, they’ll reach out to local banks and lenders to make sure you get an auto loan with terms that you’re happy with.

When your payment plan is all written out, you’ll just need to sign some paperwork. Then, the worker at the dealership will hand you the keys, and you’ll get to drive home in a great new automobile!

Shop for a New Vehicle Today

If you’re looking to buy a new or used car near Amherst, Manchester, or Derry, then you’ll want to make sure you get a car loan that you’re happy with. By following the steps recommended by the fiance team at Ira Toyota of Manchester, you’ll be sure to get the loan you want and the vehicle you’ve always dreamed of.