How to get approved for a car loan

how to get approved for a car loan

How to Get Approved for a

Car Loan & Where to Apply!

Learning how to get approved for a car loan is fairly simple if you know what it is that lenders look at when giving an approval.

There are two situations that usually present the most problems for customers looking for financing:

  • First Time Car Buyers
  • Bad Credit Car Buyers

So, what is it that lenders look at? There are five key things lenders want to know about you before they'll give you a loan. Once we've covered these I'll show you where to get a car loan online .

Your Credit Score

The first thing that lenders will look at is your credit score. It's okay if you have a zero score, but the more you know about your credit and score the easier it is to narrow your choice of lenders. What's your Credit Score? Find out FREE!

Many first time car buyers will have zero credit scores but it's those small collection accounts you didn't know were on your report that can throw a wrench into the works.

For those looking for bad credit auto loans, your credit score will determine if you will be looking for approvals from a non-prime lender (usually better rates and terms) or from a subprime lender.

Usually for the non-prime lenders you'll need a score from 540-560 or higher. Get your score and report above.

Loan Structure

Loan structure is usually not the first thing people think of when figuring how to get approved for a car loan, but it is important to know.

From a consumers stand point this usually means down payment. Can you buy a car with no money down? Yes, it's been done before, but the car you are able to may not be anywhere near what you wanted.

Minimum down payments for many subprime auto lenders (this applies for first time car buyers as well) will be in the $500 to $1000 range. I'd suggest saving at least that much, but the more you can put down the better approval you'll tend to get and the more cars you'll be able to choose from.

The following three factors are key to understanding how to get approved for a car loan, because even with a 700 credit score, if you don't pass their requirements in these areas, you will probably have to settle for a lesser approval.

Ability to Pay

A lender is going to look at your ability to repay the loan they are going to give you.

  • Do you have an income?
  • Is it a steady income?
  • Is it provable income?
  • Can you afford the payments?

Assuming all else is in line, one of the main keys here is whether or not you can afford the monthly payments.

Most lenders will only approve you for a payment that is no more than 15-20% of your gross monthly income (before taxes).

For instance, if you make $2,000 a month and the lender is saying your maximum payment can be

no more than 15% of your gross income, then the maximum payment the lender would allow you to have is $300 a month.


Lenders are looking for two forms of stability here and those are employment stability and residence stability.

The more a customer bounces job to job, city to city and/or state to state, then the higher the risk they present to the lender.

If a customer bounces job to job, they are seen as a higher risk to not be able to make their payments month in and month out.

They also don't want to give a customer a loan in Los Angeles and then have to hunt the car down in Pittsburgh if they stop making payments. Again, higher risk.

Willingness to Pay

Most everyone has the willingness to pay when they get a new car, but when figuring how to get approved for a car loan, you'll want to look at it from the lenders perspective.

Of course, they could just take the customers word for it, but unfortunately, we don't live in the "your handshake is as good as a signed contract" society anymore.

So what are they going to look at to determine if your intentions are to pay the loan?

Your past credit history. This has nothing to do with credit score, but your actual payment history itself.

  • Do you have 10 collection accounts from prior lenders that you never made a payment on?
  • Is your credit a little hit and miss? Paid some months and skipped a payment other months?

  • Or, maybe you had a major medical emergency that took your credit down hard?
  • It's amazing what a lender can learn from a customers credit application and credit report. If you haven't done so already, do it now - Get your Credit Score from - fast, free and easy!

    Apply for Your Car Loan Online

    Now that you know how to get approved for a car loan and what auto lenders look at to approve you, all that's left is to apply for your car loan online so you can buy!

    If you feel strong in all the areas above, good job. If you feel that you've missed in some areas or maybe all of them, don't worry. There are lenders that literally 100% Guarantee Credit Approval, no matter how bad your credit was or still is.

    You will need to work with a loan specialist that knows the right lenders for your situation and can help you complete the paperwork.

    To find loan specialists in your local area that work with lenders that can get you approved fast, simply fill out this easy 60 Second Auto Loan Application -> Car Loan Online and a specialist will be in touch with you shortly. You could be driving your new car within 24 hours!

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