subject: Is A New Car Loan Easy To Obtain? [print this page] When people decide to purchase a vehicle it falls into one of two categories. Depending on the current condition of the vehicle the interested individual may have to apply for a new car loan or they may have to request a used car loan in order to purchase the vehicle they desire. Whether or not the process will be easy will depend in large part on the loan requestors current financial status and credit rating as well as their debt to income ratio. For many in the market to purchase a motor vehicle the process will not be all that easy.
For those that qualify, a new car loan may be easier to obtain than a used car loan. Loans for new vehicles are often easier to qualify for since the vehicle is assumed to be in perfect working order with no malfunctioning equipment or damage. Financial institutions are less likely to loan money for the purchase of a used vehicle since the vehicle can have several hidden conditions that could make it worth significantly less than the value of the loan. Financial lenders that offer loans for new vehicles do so with the assurance from the borrower that they will carry full coverage automotive insurance for the entire length of the loan.
A used car loan applicant may have to provide sufficient detail and data about the vehicle they would like to purchase before the loan approval officer grants the funds to the borrower. There are blue book values for older vehicles which a financial institution will use to determine the fair market value for the vehicle in its current condition. If the amount of the loan being requested is significantly higher than the blue book value then the loan may be denied, or it may be approved for the smaller amount. This does not occur when a new car loan is being requested.
A new car loan application is usually filled out and submitted at the dealership where the vehicle is being offered. This is done through a special financing institution that functions as a lender for new vehicles for the dealership in question. These loans are generally offered at the lowest possible rates for the consumer with regards to what they qualify for. A use car loan application is something that is generally filled out by a local lending facility that the consumer currently does banking with.
If your credit rating is in good, or better than average standing, then applying for a new car loan should be relatively easy. On the other hand if the current credit rating has some unfinished or open and negative issues associated with it then applying for a used car loan may be more in order with obtaining the funds necessary. Each and every loan application is handled separately and all of them are put through the same scrutiny. A great credit rating does not always lead to an easy application process either. In some cases people with outstanding credit scores can be denied due to a bloated debt to income ratio.
