Ways to get your car loan application approved

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car loancar loan

Ways to get your car loan application approved

There comes a time in everyone’s life when they need to start looking for their first car or a new car. And what generally goes hand-in-hand with car shopping, are car loan approvals. The process of taking out a car loan is an important one and you need the approval if you want to get the car.  


Budgeting for what you can afford

You need to be honest with yourself and figure out how much you can afford to pay every month towards your car loan. With a vehicle asset finance calculator, you can figure out how much you’ll be paying every month to cover the cost of your car and loan, taking into account your deposit, interest rate and loan period.

Then what you need to do is deduct all your monthly expenses from your salary and see whether or not you’ll be able to afford the car loan as it stands. Having done this exercise beforehand will allow the bank to easily assess whether or not you can indeed pay the monthly instalments for your car.


And affording what comes next  

When you’re calculating your vehicle finance for your application, you need to keep in mind the costs that come after you have the car. Petrol for the month, maintenance and insurance costs will also need to be budgeted for. The money you have left after deducting all other expenses needs to be used for both monthly instalments for your car and instalments for these additional costs.

The better you are able to accommodate these extra costs after your monthly vehicle instalments, the better your chances of having your car loan approved.


Down for a deposit

Budgeting for monthly costs is great and all, but if you really want to make a positive influence on your car loan approver, bring a hefty deposit to the table. There are so many ways to save for a downpayment on a car where every rand counts.

  • Savings account: Start by opening a savings account that you can save a fixed amount of your salary every month. Most people say that 10% of your salary should be saved, just to give you an idea. Then, every other bit of cash you save will go straight into this untouchable account.
  • Money bank: Everyone ends up with a bunch of loose change that they’d rather not be carrying around. Solution? Get a little money bank to put all your change in at the end of every week or so. When it’s full, take it to the bank, empty it out and deposit it into your savings account before starting again.
  • No takeouts: If you have food and ingredients in the house, you really don’t need to eat out. In fact, while you’re saving for a car and a deposit, don’t eat out at all. The money you’d spend at KFC for lunch or Vida e Caffè for a coffee every other morning should rather go into your savings account. You’ll be very surprised at how much money you actually spend on eating out at the end of it all.
  • Decrease your monthly expenses: This will make your life easier regardless of you saving up for a car. If you’re on an extremely expensive gym membership that you don’t use to its full potential, find a cheaper deal or drop it entirely (there are other ways to exercise than at the gym). Get rid of your landline if you don’t use it, don’t upgrade your phone to a package that’s R100 over your current plan and stop your monthly subscriptions to magazines and newsletters you don’t have time to read. All this money can go towards your deposit or even your monthly instalments, which can reduce the period over which you’ll have to pay off your loan.


Settle debts

A good credit score means you have a good chance of being approved. And in order to have a good credit score, you need to settle your debts and be up to date with all your other credit payments. The amount you’re currently paying off for your other credit facilities will also be assessed so as to accurately see your affordability for a car loan.

If you have a problem paying off your credit accounts on a monthly basis, your car loan application is likely to be declined. Close settled accounts and try not to have too many credit facilities under your name. You’re just making it more difficult for yourself and when it comes time to be assessed for a car loan, it can set you back. And while you can still get a car with bad credit, you don’t exactly want to.



Having the option of trading in your current car will also help towards having your car loan approved because the trade-in value you get for it can go towards a downpayment on your new car. And we already know that placing a deposit on a car is one way to have your car loan approved.

You just need to make sure that the trade-in value of your car surpasses the amount of money you still owe the bank for that car. Then you can breakeven with the trade-in value and put the rest towards your new car.

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