If you are wondering how to get a car loan near Oakland, you’ve come to the right place. San Francisco Honda knows that purchasing a car can be overwhelming for many, so we offer many tips to help you through the process. There are three major steps, beginning with Pre-Approval.

Pre-Approval 

Pre-Approval is all about setting the parameters for what you can buy, and knowing that when you find the right vehicle in those parameters, you will be able to finance it within your budget. Before getting pre-approved, check your credit report and make sure all the information is correct. Errors or fraudulent activity on your credit report will almost always lead to loan denials.

If your credit score is 600 or lower, consider spending half a year to a year to improve your credit before applying for a loan, as a score above this threshold will get you a much lower interest rate. 

Apply to multiple lenders to shop around for the best rates, including banks, credit unions, and dealerships like San Francisco Honda. Once you have narrowed your options to the top few available to you, request interest rate quotes. Remember that being pre-qualified is not the same as being pre-approved. These are different, and it’s important to know what each one means.

When one is pre-qualified, the actual deal you could wind up getting may be dramatically different than what you were pre-qualified for, while a pre-approval is highly likely to be as advertised. It should be noted that when pre-approved, your credit score will temporarily lower. Because of this, apply to all your pre-approvals within two weeks, as this can show up as a single inquiry. 

Budget and Car Shopping

Once pre-approved with your preferred lender, you will know how much you can borrow. That maximum borrow amount is not what you can afford however, as some of that money will be required to pay taxes and fees. About ten percent of the total loan amount should be earmarked for these fees. Using an auto loan calculator will give you a good idea of what your true budget will be. Remember that you can borrow much less than what you are pre-approved for, as that is just the upper limit.

Once you have all that finance foundational work done at a finance center, it’s time to do some research and find the right car for you, within your budget. Check out our model research if you need assistance in finding the perfect Honda vehicle for your Daly City drives! Be sure that the loan offer you go with does not exclude the brand you wish to purchase from, or the dealership.

Finalize Loan Offer, Make Payments

Once you’ve been pre-approved, and have found a vehicle your lender agrees to finance, it’s time to finalize the offer. Once you’ve negotiated the price of the car, follow the lender’s instructions to finalize your funding. Sign the paperwork, read the contract, and be prepared to hit the streets of Colma with your new ride!

The final step is to make payments on time. This can improve your credit score, so that the next time you want to finance something, you can get a much better deal.