Steps for Getting a Car Loan in Detroit
If you live in Detroit, Michigan and looking for a car loan, unless you have great credit, you might find that you have a bumpy road ahead. However, it is important to realize that hope is not all lost. There are ways that you can get a loan for a car, even if you don't have the best credit out there. Take the following steps to get a Detroit car loan:
Don't Think the Worst
One of the biggest mistakes people make when trying to get a loan for a new car in Detroit is that they think the worst about their credit score and don't even try to secure a loan. This is a mistake as many people are pleasantly surprised when they are accepted. If you have poor credit, you might be paying a higher interest rate, but you can still get approved. Pull your credit scores from all major bureaus, so you know where you stand before taking the next steps to get a loan.
Go to More Than One Dealer or Lender DETROIT MI
Once you know your scores and what you are working with, you might want to go to more than one dealer or lender to secure your loan. One dealer may consider your score high risk, but another dealer may look at your score and start processing your loan immediately. Don't be afraid to shop around even if your credit is fairly good, too as you might get a better rate.
Start at Your Own Bank Before Heading Elsewhere
If you have bad credit, you may want to start the loan process at your bank or credit union. They will be more likely to give you a Detroit car loan than other lenders simply because they tend to trust their customers more than others. If your bank or credit union denies your loan application, you may find that your employer or your insurance company offers auto loans too. Try those options next.
Seek Out Specialty Lenders
Since there are millions of people who have poor credit, including thousands in Michigan, there are lenders who cater specifically to these people. If you have struck out with the above steps, you should next reach out to one of these lenders. You will likely find higher interest rates, of course, but you will still be able to get a car loan.
Focus on the Terms, Not the Payment Amount
Another important part about getting a Detroit car loan is to focus on the terms of the loan before you focus on the monthly payment. In other words, you will want to look for the lowest APR for the shortest period of time. Though you will find loan terms for longer periods which give you lower payments, when all is said and done, you will be paying thousands of dollars in fees. This is the equivalent of simply throwing money away.
Be Wary of Add-Ons
As you go through the steps to get a car loan in Michigan, you also want to be wary of add-ons. For instance, some lenders will stuff their contracts with add-ons like insurance, extended warranties and after-market services. You don't need these high-priced extras from this source, so don't pay for them.
Finally, as you work towards getting a loan for a car in Detroit, make sure your loan terms are final and not conditional. Some buyers are shocked to find that they have gotten caught up in a "yo-yo" sale, or a sale where the monthly payments increase over time. According to the Center for Responsible Lending, this happens quite often and is even more prevalent among buyers with poor credit. One in nine of these buyers find they have entered into a "yo-yo" sale without even realizing it. Always read the terms of the loan and ensure the terms are final.
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