Do you fancy luxurious cars? Is getting a second car requirement due to big families? No matter what’s the reason, having two cars parked in your garage is a great idea to lead a lavish life. Many car lovers prefer a sporty utility vehicle to hang out with friends on weekends while a decent one for daily office commuting.
Provided your pockets allow you, there’s no limit on buying the cars and being a proud owner to an arcade of vehicles. But do you need to get a second car loan? It’s possible if you can make payments as per your earnings to surge up your credit scores.
Many car owners often think about can I obtain a second auto car loan if I already have one? That’s a pretty practical quest, and we have slated down complete information revolving around this matter of context.
1Factors to Consider for Getting a Second Car Loan
Before making an application for the second car loan, undergo a detailed analysis of your debt-to-income ratio. That’s a primary factor in navigating your debts. Every alternative comes with a couple of advantages and disadvantages. The debt market also offers multiple car loan choices like auto or personal loans.
Many people prefer personal loans to spend the amount as per their will. For example, a partial portion and the other half for other expenses. However, higher interest rates make the auto loan a preferred option to invest in any vehicle.
Take a note of the following factors before you get a car loan:
- Choose the car you wish to buy and find out its value. Scrutinize costs with multiple dealers until you decide on the final one.
- Once the first part completes, the next step is, to begin with, the application process. Its viable to get in touch with the loan providers such as financial institutions and banks. They can surely render the best interest rates on your loans.
- After approval of the loan application, the bank would disburse the amount into your account, and there you are geared up to own your second dream car.
- Head on with the final purchase from the dealer, offering you the best rates along with added benefits or extra gears.
- The final step is to start paying your monthly installments until the term completion.
These steps are applicable if you take an auto loan for the first time, even though its your second card purchase. But if you are already holding a car loan debt and planning to get a second car finance, here are the steps you need to procure.
- Contact dealers to avail best deals on taking a second auto loan.
- Track your monthly incomes along with a credit report to find if you are qualified for the second car loan or not.
- Once you qualify for the second auto loan, begin with the documentation process for the same.
- The lender company would verify all the documents and re-check if you qualify for the second cars loan or not.
- After approval of the car loan application, the bank would release the loan amount into your account, and you are all set to invest in the second car.
- The final step is to maintain your credibility by paying debts on time.
2What Would Debtors Check to Approve Car Loan?
Are you already holding a car loan and planning to get the second one? Well, then the lender would evaluate quite a few facts until they approve the amount for your vehicle. Below are the top 4 factors that help lending companies to find out if you can get a second auto debt or not.
1. A credit check and History- If you think can I get a second car finance if I already have one, paying attention to the credit history is also very important. The lender would check if you are a credible debt payer or missed any payments relevant to your loan accounts. In case of any delayed or missed payments, you might face rejection of the loan application.
2. Monthly income- Another crucial factor determining if you can pay back the debt is your monthly income. The auto purchase comes with additional overheads like maintenance, insurance, and others. The lender would analyze your monthly income and other costs related to a new car and verify if you can receive a second loan.
3. Additional debts- Lenders would also calculate your debt to income ratio that must be equal to or below 43%. A lower ratio makes you a better contender for the second auto loan. This ensures that you have some savings left for making other monthly expenses. This is the best way to getting a second car loan.
4. Car Valuation- The lender would also assess the car’s valuation if you wish to purchase a second auto vehicle. Buying a lesser expensive car surges up your scope of loan approval. Thus, it’s a wise idea to minimize your loan amount for making payments on both cars.
3Other Ways to Get a Second Car Loan!
People having a car loan and planning to get the second one might undergo a lot more scrutiny. Below are the tips to follow for getting an assured car loan.
Make Application with a Co-Applicant- If you intend to get a car loan, apply with a co-applicant. Making an application with the parent or a spouse shoots up your chance to accelerate the credit score ratings and monthly savings. But you need to cross-check the same with the lender as well.
Make a big down payment with savings- Taking a minimal auto loan could help you avoid the burden of installments, but you might have to exhaust your savings for the same. Making a large down payment ascertains that you can handle the finances well, and the second auto loan would be an affordable thing for you.
Go for cheaper vehicles- If its for necessity, prefer a reasonable second auto vehicle so that your second car approval chances increase significantly.
It’s a Wrap!
Now you have all data to get a second car loan! Two cars could be a financial liability as you also have to maintain other expenses simultaneously. On approval of your second car loan, you need to make additional monthly payments, which could impact your credit scores. Those having a high debt-to-income ratio might face some issues in further time.
Hence, make a thoughtful decision before applying for a second auto loan and plan your finances well to avoid financial challenges. Consult an expert for further advice and information related to a second car loan online!
4FAQs on Second Car Loan
Q. Can I Get the second car loan?
A. Yes, its possible to get a second auto loan provided you have a good credit history and stable monthly income to pay back the debts.
Q. Is it possible to avail of two auto loans together?
A. The credit score and financial stability are the two factors that decide if you can avail of a second auto loan or not. Limiting your debt is a good idea if you do not wish to pile up yourself with too much financial burden with two auto loans simultaneously.
Q. What are the terms for a typical car loan?
A. Most of the car loans are available for a tenure of around 2-8 years, and common car loan terms are 24, 36, 48, 60 and 72, respectively.
Q. Can I get two car loans together?
A. people with good credit history won’t face issues with that, but it would pile up the debt burden and making monthly repayments would get difficult. Thus, financing for a single car loan at a time is a viable choice.