If you’re one of the millions of car buyers seeking an auto loan this year, figuring out how and where to finance your vehicle is an important step in the car-buying process.
With tens of millions of auto loans approved for borrowers every year, each buyer needs reliable access to financing before they hit the market searching for their next vehicle. This often means connecting with a lender at the start of your search.
If you’re financing a vehicle for the first time or simply looking for a refresher on how to get auto loans in Missouri, read on for a brief overview of how this process works.
Figure Out How Much You Can Afford
The process of getting an auto loan starts with figuring out how much you expect to borrow for your new or used vehicle purchase. Most consumers should set their shopping budget according to what they can afford in terms of a monthly payment on their auto loan.
This monthly spending budget will determine how much you’re able to safely borrow, which in turn will help you figure out what vehicles are within your budget. It might also affect the length of your repayment term, which can affect your interest rate; if your budget allows for faster repayment, for example, you may be able to commit to a shorter repayment period.
Depending on your lender, this may earn you a lower interest rate, which will save you on monthly payments and on total interest paid for your vehicle.
Gather Essential Documentation
Any loan application you fill out will need you to submit some basic documentation for the loan review and approval process. This will likely include, at a minimum, proof of income, recent bank statements, and state-issued ID, among other key documents.
Verify these documentation requirements with your lender prior to filling out the application. With easy access to these documents, you can set yourself up for a faster pre-approval and final loan approval.
Get Preapproved with a Lender
Once you have gathered the necessary documentation, apply for loan preapproval from a lender to get assurances of both the amount you’re eligible to borrow from that lender and the interest rate you will receive for your loan.
This information can be particularly useful when comparing interest rates and other loan details across multiple lending options. It can also save you the stress of shopping for vehicles only to discover that your preferred options are outside of your price range. In some cases, preapproval can also help identify promotional offers you will qualify for based on your credit score and other criteria.
Confirm Your Repayment Terms
After you’ve found your next vehicle, the last step in getting an auto loan is plugging in the financing numbers for that specific vehicle, reviewing the loan terms, finalizing the repayment term length, and signing on the dotted line.
If you’re trading in a vehicle, you may also need to confirm the trade-in value and have this calculated into your financing package. Because financing terms, trade-in values, and price negotiations can all change in the lead-up to finalizing your purchase, it’s important to take a second look at this information to make sure you’re satisfied with the terms. Once this is all squared away, you’re ready to buy!
Related: Is it Better To Lease or Buy a Car?
Find the Best Auto Loans in Missouri
Want to maximize the value of your auto loans? Make sure you do your homework and seek quotes from multiple lenders, including your local community bank.
Learn more about the wide range of benefits that come with doing business at a community bank—download our free guide Why You Should Switch to a Community Bank today.