Getting a new car is very exciting but it can take some time to accomplish because of the process; particularly with getting approved for a car loan. If you want to get your loan approved as soon as possible, there are four ways to help you achieve a quick approval.
How do you get a quick car loan approval?
1. Know the Required Documentation
There is more to a car loan than just signing an agreement. The number one documentation loaners want to see is proof of income. Why would they approve of a $27,000 loan if you only make $500 a month? Make sure you have proof or your earnings and you can contact the loaner beforehand to find out what types of documentation, like a computerized payslip or employer letter, they accept. You will need proof of identification as well so make sure you have your driver’s license ready and find out if you need a secondary form of identification. Failing to bring all the required documentation can slow down the approval process.
2. Calculate Your Down Payment
The Monetary Authority of Singapore (MAS) requires open market value (OMV) prices of $20,000 or lower to have up to a 40% down payment. Cars reaching above OMV of $20,000 can require a 30% down payment. If you are going to get a loan agreement and cannot make the appropriate down payment, you are not going to get approved. Be mindful not to walk-in with just enough money to pay the down-payment. Loaners or dealers may have fees for you to pay that are not included in the down payment. You can contact the appropriate agency to see if there are other expenses you can expect aside from the down payment.
3. Understand What You Qualify For
Car loan approvals take things like your current debts and monthly income into consideration when making a final decision. Average car payments will take 20 to 40 per cent of your monthly income. So, if your monthly income can afford a $700 monthly payment but you apply for a loan that will require $850, you are going to be denied and will have to start the process all over. The monthly amount you can afford can be based on what your average income is or how much money is already being taken out for other debts. Find out what payment percentage will be applicable to you and apply for a loan amount that you can afford.
4. Don’t Forget Your Credit Score
Your credit score will influence whether your loan would be approved or the quantum would be given. Although you can be loaned 70% of the purchase price, the bank is not forced to give you that amount; making you pay a higher down payment. See where your credit score is at and determine if you need to save more money or build higher credit.
5. Be Prepared
By being prepared before you apply for a car loan, you are more likely to experience a quick approval!