How to Get a Car Loan

When shopping for a new vehicle near Lowell, Dracut, or Tewksbury, you’ll need to decide how you want to finance it. The most common way is to take out a loan, which is quite a straightforward process. Keep reading to learn how to get a car loan, then contact Ira Toyota of Tewksbury when you’re ready to buy a new or used Toyota!

What is APR for a Car Loan?

1. Check Your Credit Score

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Before you can get an auto loan, it’s important to know what your credit history is like, as your credit score will play a significant role in the rate you’ll get for your loan. You’ll want to start by checking your credit report, which you can access for free through Equifax®, Experian®, or TransUnion®. Make sure that all the information is correct and that there’s no fraudulent activity; if there are any errors, get them fixed right away before applying for a loan.

If your credit score isn’t exactly where you’d like it to be, it’s not to worry—raising your score is as simple as taking the time to practice good financial habits. Things like making all your payments on time and paying off any outstanding credit card balances can both boost your credit, for example.

2. Determine a Budget

After you look into your credit history, you’ll want to come up with a budget to see how much you want to allocate every month for your new car. To figure this out, start with your monthly income after taxes, then subtract your usual monthly expenses, like gas or groceries; for bills that don’t come every month, you can take the yearly charge and divide it by 12.

The final number you get will give you a better idea as to how much wiggle room you have for your monthly automotive budget. It’s important to note that when you create a budget, you’ll want to plan ahead and consider extra vehicle costs; these include new car registration, auto insurance, and regular maintenance. All in all, putting down all your finances like this will enable you to more easily figure out how and where you want to allocate your money every month.

3. Get Pre-Approved

Once your budget is all laid out, you’ll want to get pre-approved for a loan. The good news is that this step can be done from the comfort of your home!

When you go on any dealership’s website, you’ll find a short and secure finance application to fill out, which will help determine what terms, interest rate, and loan amount you’ll receive. Keep in mind that a pre-approved loan only lasts a few days, so you’ll only want to do this step once you’re just about ready to shop for a car.

4. Pick out a Car

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Now comes the most exciting part: shopping for a new car! To help narrow down your options, think about exactly what kind of vehicle you want. If you regularly take long drives to work by yourself, for example, a fuel-efficient sedan with advanced technology could work, such as the Camry. However, you may need an SUV to drive the kids to school, sports practices, and anywhere else they need to be, in which case something like the RAV4 would work well.

Once you’ve decided on the type of car you want, you’ll want to visit your local dealer to see what they have available. Once there, a staff member will walk you around the showroom and lot while also covering the features that are in each model. Think about what features you absolutely need to have, and see if they fit into your ideal budget. Then, test drive a few cars to help make your final decision!

Start Shopping for a New or Used Toyota Today!

The final step is to visit the finance center to get your loan, after which you can drive home in your new or used Toyota. At Ira Toyota of Tewksbury, we’ll guide you through each part of the process, ensuring you feel confident in all steps of your car-buying journey.

To get started on finding a new automobile, contact your dealership near Lowell, Dracut, and Tewksbury. We look forward to helping you drive home in your dream car!

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