If you are looking to finance a new car, there are many different options that you will need to consider. Although most people know that you need to shop around for the best deal on a car, they often neglect the importance of financing in the process. Here are the basics of how to finance a new car.

Pre-approval

When you are about to start shopping for a new car, one of the first things that you should do is get pre-approved by a lender. This does not mean that you should go into a car dealership and asked to be pre-approved. You should shop around with different lenders outside of the car dealership. In most cases, you will be able to get a better deal by working with an independent lender. The pre-approval process is usually pretty simple. You will fill out a simple application form. The lender will then look at your credit history and ask you how much money you make. If you meet their lending criteria, they will pre-approve you for a certain amount. You will then be able to shop around with any car dealer and know that you are going to be able to get financing.

Getting the Loan

Once you have found a vehicle that you like, you should have no trouble getting access to your money. You will need to go to your lender and let them know what you are going to purchase. You will need to give them the exact amount that you are going to need to borrow. You are going to have to go over all of the loan documents with a loan officer. They will go over all of the terms of the loan and make sure that you understand them. You will then have to sign off on the loan, and they will provide you with the money that you need to make the purchase.

Banks

One option that you will have is to finance with a bank. All of the local banks in your area will offer some type of auto financing. If you already do business with a bank, it may be to your advantage to get a loan with them. They may be able to give you some type of discount since you are an existing customer.

Credit Union

Another financing option that you should definitely consider is a credit union. Credit unions are often overlooked, but they have some of the best interest rates in the industry. Since they are nonprofit organizations, they do not have to pay taxes. This means that they can save significantly on their costs and provide lower interest rates to their customers.

Online Lenders

There are also many online auto lenders that you might want to take a look at. Online lenders are extremely convenient and will typically give you a decision on your approval within a very short period of time.

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