So, you’ve decided it’s time to get a car. You’re feeling the used car thing, instead of the brand new one. But you’ve got to figure out how to get that loan.

Who offers used car loans? How do you get a used car financed? Where do you find the best used cars?

It’s all a bit overwhelming. You need some advice. And we’ve got it for you.

What You Need to Do Before Getting a Used Car Loan

There are several things that need to be in place before you go out and get that loan. You’ve got to do some research on financial institutions, car dealerships and more, but there are other things behind the scenes that you should consider before getting started.

1. Check Your Credit Score

Your credit score will affect your ability to get the right used car. While having bad credit won’t remove your chances of getting a used car finance loan, knowing what your score is can help you find the right institution for seeking that loan. You can use a site like Credit Karma or Free Credit Report. Both sites, along with many others, offer free credit checks for yourself. These sites are designed for monitoring and working on your own credit scores, so checking your score on them won’t alter your credit.

2. Understand Your Budget

Your budget for buying a used car will include three perspectives. The down-payment, the monthly payment, and the over-all cost of the car loan, including interest.

  • Down-Payment Amount

You’ve got to know what you can do up-front as you buy the new-to-you car. Financial experts recommend that you aim to lay down 20% of the total car cost as your down-payment. If the need for a vehicle came up suddenly, you may not be able to do this. You will have to figure out how much you can do, though, before going into a bank looking for a loan.

  • Over-all Cost of the Car

You’ve got to look at the long-term total cost of the car, including interest rate amounts and how you’ll pay on that. This will determine what kind of loan you can do. If you know you’re only willing to spend $10,000 total long-term on a car, make sure you calculate the interest payments into that amount before discussing a plan with your loan officer.

  • Monthly Payments for the Loan

Knowing how much you can pay each month is important, too. You need to take into account your normal monthly income, without any extras that might not come in every time. Many experts suggest aiming for no more than 10% of your income as your payment budget per month.

3. Get Pre-Approved for a Loan

While it’s tempting to dash out to your nearest dealership to find the perfect car, you should head to your bank or credit union first and get the loan taken care of. Talk to your loan officer and find the right loan for you, based on the budget you’ve set. If you have bad credit, be aware of that before going in, and ask questions on how to deal with that. If there’s time to recover some bad credit issues before making the loan application, this is recommended. Things like paying down credit card balances or paying off old debts can help on that score. If you cannot wait to purchase the car, be direct with your loan officer and see what options they have for loans that may be available to those with poor credit scores.

Where to Get a Used Car Loan

Wells Fargo car loans, Bank of America auto loans, or Capital One auto loans are good places to start your search. If these banks don’t provide the terms you need, you can always try your own bank or credit union, online sites or even dealerships.

Where to Find the Best Used Cars

Many banks have pages designed to help you look for the right car, but they can also help you navigate these options in person. Great used cars can be found online on dealership sites or general car sales sites, like CarMax, as well. If you go that route, make sure that your loan program will work with the given dealership before investing too much time. Before you make any used car purchases, though, be sure to check the Kelley Blue Book to know the recommended fair rates for a given car.

When you’re ready to buy that new-to-you car, consider your budget, your credit score, and get that pre-approval for your loan. Whether you get a Wells Fargo auto loan, or a loan from your local credit union, be sure to know your interest rates and the value of the car before you buy. Be honest about your needs and your wants, and trust your loan officer to help you find the best option for your financial standing.

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