Can I Get Approved For a Car Loan If I have No Down Payment?
With interest rising for financing options in used car sales, it is important for the buyers to educate themselves on the details and requirements of a car loan. One of the main concerns buyers have when playing with the idea of financing their next vehicle is: How much down payment do I need? The answers may vary depending on the vehicle and situation. One thing is certain, if you need a car and have bad credit, you can get a $0 down approval. Down payment is not a requirement as much as it is an option. People with good credit will have more flexibility with all aspects of the loan structure, so naturally, down payment is usually not asked for. When you are dealing with bad credit, down payment is only necessary when the vehicle you choose exceeds what the bank sees affordable.
Affordability is a crucial part of all car loans as this is the main aspect that the banks are most concerned about. If the affordability is not there, they will not get the return they had hoped for. When a lender calculates and determines what is affordable to the applicant, they will consider all monthly obligations such as monthly phone bill, minimum payments on credit cards/loans, and also rent relative to what the applicant’s monthly income is. Once that is calculated, the bank will then find the percentage minus what they see as living expenses and conclude with a payment threshold.
Understanding the breakdown of what a lender considers in a car loan, you will see that as long as you pick a vehicle that will give you a monthly payment within the threshold; you will be able to acquire approval with no down payment. When you are browsing around for your next vehicle and have yet to determine what the banks see as affordable in your case, you can consider two aspects on the vehicle to increase your chances of getting that ideal approval. Aspect one is the year and mileage of the vehicle. As the vehicles year and mileage determines the length of the loan, it is beneficial to pick a unit that is newer with reasonable kilometers which will in turn, give you a longer term. A longer term will lower your monthly payment. Another aspect to keep in mind is to make sure you choose a car you are comfortable in but also with a reasonable price point. If you have difficult credit to deal with, start off with a loan that you are confident in being able to pay off. If you wish to get pre-approval today, please fill out our online no obligation finance application https://www.autorama.ca/financing/. If you would like to explore the options of obtaining a $0 down approval you’re your next car loan, have a finance specialist walk you through the process by calling Autorama at (416) 739-7262. Knowledge is power, empower yourself for your next purchase!
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