How to Use Your Tax Refund to Buy a Car Now

Wondering if you can use your tax refund to buy a car? The short answer is, yes. You can! You may not realize it, but your tax refund is actually the perfect amount of money to get you into the driver’s seat of a brand new or new-to-you car. Follow along and we’ll show you exactly how to use your tax refund to buy a car in a few simple steps.

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Ready to Buy a Car with Your Tax Refund?

Consider your down payment.

Putting some thought into your down payment will help you determine which car to buy and how much financing you’ll need. Unless the car you’re looking to buy is on the cheaper side, your tax refund will likely only cover a portion of the purchase – the down payment.

The down payment is the part of the purchase price that you (the buyer) pay in cash and do not finance with a loan. Some lenders do not require a down payment, but most do. Even if your lender does not require a down payment, it can still be in your best interest to make one. The more you put down upfront, the less you need to borrow. A smaller loan means smaller payments!

Plus, a large down payment can help get you approved if you’re applying for a car loan with poor credit. You’ll be borrowing less (so less risk for the lender) and will show the lender that you’re serious!

How do you know if your tax refund is enough for a down payment?

  • For a used car loan…you generally want to make a down payment of 10%. For a car with a purchase price of $15,000, you’d put down $1,500 and finance the remaining $13,500.
  • For a new car loan…you’ll want to make a down payment of 20% or more. So if the purchase price of the vehicle is $20,000, you’d put down $4,000 and finance the remaining $16,000.

The average tax refund is about $3,120, reports the IRS. How much is yours? If you receive the average amount, you could easily buy a car with your tax refund! Put down $3,120 on a used car with a purchase price of $15,000 and you would only need to finance $11,880.

Apply for auto financing before visiting the dealership.

It’s often best to secure your financing before going to the dealership. Car dealers make a profit by referring you to their preferred lender, marking up interest rates, and even inflating the price of service contracts and other vehicle insurance products. Once you’ve been pre-approved, you can confidently walk into the dealership knowing that your financing is good to go.

Apply for an auto loan online once you receive your tax refund check. Since some lenders require down payments and others don’t, it’s often best to apply and do some comparison shopping.  Apply through myAutoloan and we’ll match you with up to four offers in a few short minutes. No obligations and no hassles. Choose your offer and then receive an online certificate or check within 24 hours. Use your check to buy the car you want, where you want! Can you say the same for dealership financing?

During the application process, you’ll be asked for the estimated purchase price of the vehicle and your estimated down payment. With your tax refund check in hand, this last number should be easy!

Now buy a car with your tax refund!

Time for the fun part! With financing in hand, you’re ready to get the best pricing on your new or used car. You know how much you can afford, the type of car you want, and how you’re going to pay for it. The car salesman wants to sell you a car and you’re ready to buy. You’re a serious buyer with financing in hand – it’s time for a test drive!

And even if you don’t need a new car? You can still spend your tax refund wisely by…

  • Paying down an existing car loan or getting ahead on payments
  • Putting your refund towards the principal of an existing loan and applying for a better interest rate on the remaining balance (a.k.a refinance)
  • Take care of important car repairs and maintenance services

This year, put your tax refund towards something that’s useful and you’ll appreciate for years to come – a reliable car that you’re proud to drive! Apply now and compare up to four offers in just minutes. If you’re still waiting on your refund, learn more about auto financing from the pros at myAutoloan

How To Get A Bad Credit Online Auto Finance Loan

These days, it can seem difficult to impossible for good people that have had bad things happen to them to get an auto loan.  It’s important because to get anywhere without a vehicle is just not practical. At the same time, the economic situation is turning very positive and it might be easier to get a new auto loan or an auto loan refinance, so it’s a smart thing to try and obtain an auto loan.  The majority of people with a vehicle usually want to need to finance it so finding a good source is not only smart but important.

Unfortunately if your credit is not the best it can be difficult to get your credit score high enough to qualify for a low interest auto loan.  Fortunately, there are companies that have many lenders on their website that offer online auto financing to auto loan seekers with poor to great credit.  Finding the right lender for you is a simple and quick process if you can find a company like myAutoloan.com – and there is no cost to get multiple loan offers!

You will not have any difficulties finding online financing on this website prepared to offer vehicle loans if you have bad credit.  Fortunately, there are several lenders specifically looking to help provide vehicle financing for less than perfect credit individuals.  Be aware thou that you may face a problem when you try to deal with unknown lenders who could try to take advantage of your situation at a site that you have never heard of.

Be careful when you do a search engine look-up for bad credit auto loan especially with websites that you may never have heard of before.  One very good thing for you to do is take a look at the reviews of the site before you apply.  Is it an outside source supplying the review?   Remember there are a lot of unscrupulous websites that prey on people that promise to give them a bad credit auto loan – many with crazy high interest rates.   Only deal with reliable website but a credible lending institution when looking for vehicle financing.

Take note – If you search online for online financing, you may come across a number of advertisements that claim a guaranteed approval – be very careful about these sites.  Working with a well-respected company is the only way to combat all the false claims made online.  In some instances, these advertisers are not really providing you an approval, but are simply passing you on to a referral third-party vendor that is not a licensed auto finance company.

Applying with such a site will not get your any approvals but get you on a host of non-related emails that have nothing to do with auto loans at all.  Avoid using these services and look for a website that has multiple auto loan lending institutions that work directly with the applicants.  You will find it easier to get a loan when dealing directly with a lender that you have been matched up with on a credible and well respected site.  Want to see what kind of rates you might get?  Try using an auto loan calculator before you apply to see what rate you might be able to obtain.

Let’s review – When looking to apply for a bad credit auto loan, look for credible websites and lenders that have been in business for some time.  It might be helpful to review a guide on online auto loans before you get started.  Having a bad credit score can be a problem that can quickly get out of hand when dealing with unscrupulous websites.  You can still get a bad credit auto loan, but be sure to look for a reputable website with reviews by an independent third party.  Ideally they will understand your problem and will offer you multiple offers so that you can choose a loan that works best for you.  Good luck and good hunting.

The Important Difference Between Hard & Soft Credit Checks

If you’re getting ready to apply for financing of any sort, you’ve probably got some questions about credit—especially if you’ve heard the rumor that simply applying for credit could hurt your credit score. Don’t let this rumor stop you from getting the financing you want. We’ll help you understand the difference between hard and soft credit checks, as well as how they come into play when you apply for an auto loan.

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What Are Hard and Soft Credit Checks?

Any time your credit report is accessed, it’s recorded with a credit reporting agency (the three biggest being Experian, Equifax, and TransUnion). This is technically called an “inquiry,” though you may also hear “check” or “pull.” Inquiries include information about who’s making the inquiry, what it’s for, the date it’s made, and the type of inquiry. There are two types of credit checks or inquiries: soft and hard, which we’ll explain below.

No time to read it all now? Take a quick look at our reference table for the key points.

A quick look at Hard & Soft Credit Inquires
Hard Credit Inquiries Soft Credit Inquiries
Factor in lending decision Yes No
Visible on credit report Yes No
Time on credit report 2 Years N/A
Your permission required Yes No
Can impact credit score Yes No

Soft Credit Checks

Soft credit checks occur when you check your own credit, when your credit is reviewed as part of a background check, or when a company checks your credit to pre-approve you for an offer. A potential employer may run a soft check on you, too.

Soft checks don’t impact your credit score and are typically only visible to you when you review your credit report. Potential lenders can’t see soft inquiries and according to Experian, “soft inquiries are never considered as a factor in credit scoring models.”

Examples of soft inquiries include “pre-qualified” credit card offers, “pre-qualified” insurance quotes, and employment verification.

Hard Credit Checks

Hard credit checks are tied to actual credit applications, usually ones that you initiate. They require your permission and occur when a lender or financial institution checks your credit in order to make a lending decision.

Hard checks stay on your credit report for about two years and can lower your credit score by a few points. This is a key difference between hard and soft credit checks. Most of the time, though, a single hard inquiry won’t play a major role in whether or not you’re approved for financing. Lenders understand that most people compare loan options when buying something as big a house or car.

Still, it’s not a good idea to apply for a bunch of different credit cards and loans at one time. Multiple hard inquiries for different types of credit in a short period of time can signal to lenders that you’re in a financial pickle. They may assume you’re having trouble paying bills, getting ready to rack up debt, or that you’re short on cash—all signs that you could be a risky loan recipient.

Examples of hard inquiries include applications for a mortgage, auto loan, credit card, student loan, personal loan, or apartment rental.

What to Know About Hard Credit Checks & Car Loans

Applying for an auto loan requires a hard credit check. In the long term, applying for an auto loan usually doesn’t hurt your credit score. Most reporting agencies recognize that when people shop for an auto loan, they’re going to compare multiple loan options in a short period of time. That’s why the top three credit reporting agencies (for the purpose of credit scoring) roll multiple auto inquiries into one inquiry on a continuous, 14-45 day cycle.

Remember that hard inquiries are only one factor used in calculating your credit score. There are many others! Your payment history, mix of credit types, length of credit history, and credit utilization ratio could all have a much greater impact on your score.

Now that you know, do you feel like a credit pro? You should! Worries over a hard credit inquiry shouldn’t prevent you from applying for financing when you need it most. A record 107 million Americans have auto loans, reports the Federal Reserve Bank of New York. That’s about 43% of the entire adult population in the US. Put your newfound knowledge to use building your credit score and apply for auto financing today.

How to Get a Car Loan with Little to No Credit

Looking to get a car loan with little credit? Maybe get a car loan with no credit? You’re not alone. Research by the Consumer Financial Protection Bureau found that 26 million American adults have no histories with national credit reporting agencies. An additional 19 million have credit reports that are so limited or out of date that they are unscorable. If you’re one of these Americans, you don’t have to be stuck riding the bus or bumming rides from friends. With the right information and a little hard work, you can get behind the wheel of a new or used car in no time. Just follow these 7 steps to get a car loan with little to no credit!

7 Steps for Getting a Car Loan with Little Credit

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1. Check your credit report. It may include inaccurate information that’s unfairly impacting your credit score, an issue that’s relatively common. In 2016, more than 43,000 complaints posted to the Consumer Financial Protection Bureau’s website were complaints about credit reporting. A whopping 74% of these complaints were about the credit reports including incorrect information, notes MarketWatch.

You’re allowed one free copy of your credit report from each of the credit reporting bureaus (Equifax, Experian, and TransUnion) each year. Before trying to get a car loan with little to no credit, check your report for errors. Then, dispute any errors with the credit bureau who distributed the report. Once any errors are corrected, you may find that your credit score improves. Even if there aren’t any errors that need resolving, it’s still a good idea to see exactly where you stand before applying for an auto loan. Check your credit scores from all three bureaus at FreeScore360.com.

2. Open a checking or savings account. You may already have a bank account in your name, but if not, this is the perfect time to open one. (And it can help you with the next step!). A bank account can act as financial proof that you can afford your car loan payments. While it’s not technically required in order to be approved for financing, it could improve your chances with lenders. Opening and maintaining a savings account can also help you establish healthy saving habits and get closer to your dream of buying that new car— one dollar at a time!

3. Save for a big down payment. The bigger your down payment, the less you’ll need to borrow. It’ll make a car loan easier to get with no credit and you’ll end up paying less for the car in the long run. How much should you put down? An Edmunds analysis of new- and used- car purchases in 2017 showed that the average car down payment was about 12%, however, conventional wisdom says that you should shoot for 20%. As someone who’s looking to get a car loan with little to no credit, you’ll want to lean toward a down payment that’s closer to 20%.

“Making a bigger down payment could increase the chances of being approved for a loan,” advises Edmunds. “Banks and finance companies want to lower their risk of not being paid, so they prefer loans of smaller amounts. The more you put down, the greater your chances will be of being approved.”

What about those catchy “zero down/zero APR” advertisements? Forget about them, for now at least. As few as 10% of shoppers actually qualify for them, says Edmunds, and your credit typically has to be in “great shape.”

4. Get a co-signer with better, more established credit. In the eyes of a lender, a co-signer reduces risk. If you aren’t able to make your loan payments for any reason, the cosigner is expected to do so. Co-signers are additional assurance that the loan will be repaid. A co-signer can be a friend, spouse, parent, or other family member. Lenders can’t require that you have a co-signer if you’re trying to get a car loan with little to no credit, but they may not offer you the loan based on your financial situation alone. A co-signer can make it possible for you to get financing approval or a better interest rate.

5. Compare financing options. Shop around! As much as you want to get behind the wheel of a new car as soon as possible, patience can pay off. Your first option might not be your best financing option, especially when you’re trying to get a car loan with minimal credit. Different lenders offer different loan terms and interest rates. Even loans with the same interest rate will yield different payment amounts depending on the length of the loan, so make sure you’re comparing “apples to apples” before committing to one auto loan.

6. Build your credit. Ideally, you’ll work to build and improve your credit so that you’re eligible for the loan amount, interest rate, and loan terms you really want. This process can involve getting a credit card, paying bills on time, and staying within your credit limit—all habits that can take months to establish. For many people, though, waiting to buy a car until you have perfect credit isn’t realistic. Life doesn’t stop. The kids still need to get to school. You need to get to work. Thankfully, making car payments on time is a great way to build your credit (and keep your means of transportation).

7. Apply for a car loan! Whether you’re working on saving up for a big down payment or searching for a co-signer, you’ve got to start somewhere. At myAutoLoan, we work to meet your needs as quickly as possible. We welcome all drivers to apply to get a car loan, even drivers with little to no credit. Use our application and you’ll save time and money, since we only present you with offers that match your situation. Submit your auto loan application today and compare up to four offers in minutes! (Remember step #5?!)

 

4 Key Ideas for Getting an Auto Loan

Shopping for a new car is mostly a pain – it is from my perspective anyway and over time, there are things that can be shared to make this process a lot easier. To start with, getting pre-approved is one of the best things you can do.  The “Why” is very obvious if you have ever spent 3 hours in the “Penalty Box” at a car dealership!  It’s all meant to wear you down and keep you invested in the “buying” process.  The loan process can seem like a daunting and difficult process but it is not.  I’ll share a few things that can make this easy.  Here are a few tips for getting a car loan the easy way.

  1. Know How Much You Want to Spend

If you already know what you have to spend, great! So many car buyers really don’t know until they get on the dealers’ lot. If you don’t have a budget set, list your monthly income after taxes and subtract all your monthly expenses. If you are trying to save, don’t forget to put that on the list as to how much you want to put back. Consider that if you end up with being able to afford $600 per month, that is could take away from your monthly savings. If you have annual expenses that come in once a year, just divide the total expense by 12 and add to your monthly worksheet. One more thing to consider – You will have some “new car costs” from your purchase so don’t forget to add insurance, registration, car maintenance and possible repairs to your list. Keep working with the numbers until they come in at a range that will make your car easy to afford.

2.  What Can you Afford

If you have done your due diligence, you are now close to understanding and deciding on a reasonable monthly car payment that will fit your budget. Now, with a payment amount in mind it is smart to utilize a car payment calculator to get an idea of a total dollar amount you can establish for your car purchase.  You can use auto loan calculators to get an idea of interest rates, monthly payments and total costs that you are able to afford.  You can choose if you want a 36, 48 or 60 month loan and it calculates all the above for your convenience.  Knowing this puts you in a much better position to work with the dealership and can help keep you out of the lengthy negotiations with the finance manager.

3. Get Pre-Approved

You can now take control of the auto financing process by getting preapproved for your auto loan before you ever step on the dealers’ lot. Getting multiple loan quotes is an outstanding way to be in charge of your loan process.  Go online and see who offers multiple loan quotes and apply.  This is the best way to get the best interest rates, best terms and be in control of the loan amount that you can afford.  Since most loan offers online are only good for up to 30 days, make sure you are ready to get out and find the auto you want.  Know that some offers have stipulations attached to them but if you use a lending platform, you can get real auto loan offers in real time and they are all good at franchised dealers.  The better your credit, the better the offers as the lenders will try to be a competitive as possible to earn your business.

4. Start Shopping

Now the fun part begins – shopping for your new wheels. Make sure you do your homework and do some research to find the autos that will fit your needs the best. Consider things like miles you drive, MPG, color and size of car that you want and any extra features that you are looking for. If you do your research up front, you are going to be in a great position to come out on top when you finalize all the details. By using these steps, you’ll be in a position to not only find the best auto financing, but the best value auto. Be prepared. Be smart. Success!