5 Steps To Take Before Applying For Finance

Applying For Finance

Applying for finance can seem like a daunting process. It can be hard to figure out the first steps to take and whether or not you’re even eligible for one. For something as simple as buying a car, there can be so many options for finance.

For today’s article, we’re going through all the crucial steps you should take before applying for finance and what to look out for before you sign on the dotted line.

Step 1: Compare and Limit Your Enquiries

A finance broker has access to many lenders and provides you with a larger pool of loan products to choose from. Whenever you apply for finance, a credit enquiry is lodged on your credit profile. The more enquiries you make, the more marks you’ll end up having on your credit profile.

So choose wisely before you start making enquiries. Think about all the queries you’re making and how other loan providers will view your credit history.

Step 2: Discover What Your Current Credit Score is

Finding out your credit score should always be a top priority. Your credit score is vital to any loan application process, especially when you’re purchasing a car. Don’t despair if you have a low credit score. There are a few steps you can take before applying for a loan that can help boost your credit.

Firstly there are several ways you can check your credit score that is absolutely free! You’ll find many loan providers have online credit score checkers that only take a few minutes to calculate for you. After generating a credit report, you may notice errors in your credit that you’ll need to correct in order to improve your credit score.

This period of time is also an excellent opportunity to start being more proactive about your credit score. Consider avoiding hefty credit charges, paying bills on time, and avoid applying for additional credit cards to help boost your credit score.

Step 3: Identify What  Your ‘must-haves’ and ‘nice-to-haves’ are

After shopping around, you’ll notice asset finance is not a “one size fits all finance product’. It’s important to identify precisely what is crucial to you. It’s important to consider exactly what your ‘must-haves’ and nice-to-haves’ are before you apply for finance.

Think about the features you really need for a loan such as options for extra loan repayments, add on insurance, and warranties. Make a list of both your ‘must-have’ and nice-to-haves’ to identify things you really need and the things you can do without. Always think about this list before you apply for a loan.

Step 4: Using a Finance Broker

There are several options for getting finance today. You can go through options such as a dealer, bank, or even a finance broker. Using a finance broker will give you access to a wide range of lenders and loans. You won’t be restricted to a single option that most banks seem to offer today. Before you select a finance broker, it’s important to consider the following points:

Timing

The entire process of applying for finance can be tiring. Luckily, a finance broker can do all the hard work for you by comparing finance products without taking multiple hits on your credit score. Trusting a finance broker can save you a lot of time and effort for the finance application process.

Knowledge

Finance brokers have a fantastic knowledge of all the current lenders and finance solutions available in the market today. Their aim is to find you the lowest repayments and best interest rates for your lending scenario. They will also take extra care of looking into features such as establishment fees and account keeping fees.

Connections

Finance brokers are often associated with a large number of bank and non-bank institutions. These brokers also have access to a variety of products and lenders.

Step 5: Pre-Approval

Getting your finance pre-approved is one of the easiest ways to simplify the process of buying a car. Pre-approval will help you know exactly what your maximum spend is and what’s within your budget. Once you have finance pre-approved, you can shop around for that new car you’ve dreamed of from either a dealer or private seller.

After deciding on the car, you want to purchase, simply let your Finance Specialist know and obtain all the relevant documentation they need from the seller to finalize your loan. Your loan will then need to be submitted to your lender for settlement.